Filling Chapter 13 and have multiple questions

[Newborn]

I had a major life situation which has led me to file for BK. Married with household income over 300k.

1. Married and Tax filling jointly.
2. All debts are unsecured.
3. Filling single.
4. First mortgage $750k in spouse name. All payment current
5. Second mortgage $470k in my name. Payment is current. Leased out on rent to own
6. Total unsecured debt $86k
7. Student loan $78k
8. 2 cars in spouse name $1600 monthly
9. Have 2 unsecured loans just filed summons for total of $39k. Filed an answer with the court clerk

want to know if anyone has an idea of the following:
1. Would I qualify for Ch 13
2. From experience does anyone know if I will be on 100% plan
3. Just got an attorney. Any advise on questions to ask the attorney

thank you in advance

[justbroke]

There is something that few people (usually) need to worry about when filing a Chapter 13. That's the eligibility requirement found in 11 USC 109(e). Specifically, a Chapter 13 is for debtors that do not have a lot of unsecured and/or secured debt. That amount was $465,275 for unsecured debt and $1,395,875 for secured debt (as of April 1, 2022).

However, there was a Corrections Act which, as part of the CARES Act I believe, fixed some bankruptcy provisions to temporarily remove change those restrictions for 2 years. Under the temp fix, the maximum is $2,750,00 for both unsecured and secured debt combined (no distinction between them). I think if you were to file a Chapter 13 before March 31, 2024 then you'd be able to use these temporary numbers. I don't think you would have exceeded the unsecured debt limit, but this temporary act seems to fix your issue either way!

You will need regular income to fund your Chapter 13. Some calculations must be done to determine your expenses. I don't even know where to begin with the home because that could complicate things. I'm worried about any equity that you do have in the home! That could make it so that you have to pay most of the money back to the unsecured creditors (based on the Chapter 7 liquidation test).

You'll need the attorney to look at your specific numbers, consider that only you are filing, how the home will be treated (especially since it appears that it's not your homestead!), and other factors. I don't see any reason why you couldn't file... but it could be a 100% plan.

Welcome to BKForum!

[Newborn]

Thank you justbroke really appreciate. Luckily, my own home only has about $50k equity. Heard after commission on sales, it would not be worth selling for the liquidators.

[despritfreya]

Concurring with JB, with over $300k in household income and, what appears to be an investment property, my guess is that you will pay close to 100%.

Student loans are unsecured debt - just not subject to a discharge. It appears you have $203,000 in unsecured debt (86k + 78k + 39k). Depending upon the non-exempt equity in the rental property as well as its positive cash flow and your ability to pay, you may or may not need to pay all unsecured debt. This determination can only be made by a careful review of your situation. Just remember, the more you have to pay, the more that will get paid toward the student loan, assuming a timely proof of claim is filed.

Des.

[Newborn]

Thank you so much despritfreya I really appreciate prompt detailed response. I am glad I found this forum.

Are there any suggestions of questions I need to ask my attorney. I lost my dad 2 years back and the burial cost was very high. I now have to take care of my aged mother who is in a different country. That is taking a huge toll on finances. Will expenses outside the US be allowed in calculating expenses.

Also, if a creditor does not file a claim, can they come for the debt after the BK has been discharged.

Also have about 20k in personal medical bills. Not sure on how to go about getting documentation on those. Been throwing them in the trash over the past year.

so sorry for the multiple questions. I know everyone are busy with their personal lives, and I sincerely appreciate the time you all have taken to respond. Blessings to all

[justbroke]

I thought I'd give a quick reply and Des will likely reply later.

Also, if a creditor does not file a claim, can they come for the debt after the BK has been discharged.

Not if the claim is unsecured or is otherwise is otherwise dischargeable. A secured creditor doesn't have to file a claim but many debtors (through their attorney) will file a claim for the creditor so that they get paid in the bankruptcy. Anything else that has been scheduled and is dischargeable will be discharged and subject to the permanent discharge injunction. That injunction prohibits the "personal" collection against the debtor for those debts. The debt doesn't disappear... it's just goes into a non-collectible status and the creditor cannot pursue the debtor personally.

(A co-debtor, though, could be held liable. This is a problem that could happen when there is a married debtor who is filing individually but has co-debts. Very important to consider the strategy used in that particular case.)

Also have about 20k in personal medical bills. Not sure on how to go about getting documentation on those. Been throwing them in the trash over the past year.

On your bankruptcy schedules, just list the original creditor and put at least $1 or mark it as unknown. A good estimate is fine. Your attorney will actually do this. Just make sure you have at least the original doctor/creditor and some idea what you owe.

so sorry for the multiple questions. I know everyone are busy with their personal lives, and I sincerely appreciate the time you all have taken to respond. Blessings to all

Questions are fine! We are here to help.

[despritfreya]

The only thing I wish to add to JB's comments relates to supporting your elderly mom in another country. The value of the support will need to be disclosed either on question 13 or 18 of the Statement of Financial Affairs. You may have to account for these gifts in the amount you pay to the unsecured creditors under the Plan. Further, I consider this expense as something that can be listed as a monthly amount on Schedule J. A Trustee may complain about it but, from my perspective, too bad. Please discuss the support of the elderly parent with your attorney.

Des.