Question on what type of debt I have here.

[daisey]

We have a house we are going to file on it is a secured note for 100,000 and a second on it for 24,000. These are secured debts we are going to give the house back, does this then make these amounts unsecured........from some things I have read after the 5 year payment plan it appears we will still have to pay the remaining balance on these notes....is that correct? I was under the impression we would be done with all the remaining debt at that time.

We have a home here we are going to keep.

We have a time share for 8000, we are going to sacrafice and a total of 13000 of credit card debt that we are turning over. My attorney said she has never done a chapter 13 with all unsecured debt..........

I read some where that you don't pay back on unsecured debt....wouldn't this in fact make a chapter 13 no different then a chapter 7?

[HHM]

Just for clarification, you have TWO houses, one you are giving up, and one you are keeping, as well as a timeshare you are giving up, correct?

Assuming you complete your chapter 13 and it is discharge, you will owe NO money on the home you are giving-up. Also, that debt is secured debt...the only way any part of it becomes "unsecured" debt is if the home is worth less than what is owed. Remember, the mortgage note holders, once you give the house up, will foreclose and sell the house at auction (or take it in as a REO). That is how that debt is satisfied. If there is a deficiency balance, then what happens will depend on your state's law, most states do not allow mortgage note holders to seek a deficiency judgment, so you will have to check that with your attorney. In any event, you will owe nothing on the house upon discharge of your BK.

Whether you pay back unsecured debts depends on you circumstances, if you enough disposable income, as determined by the BK court, to pay back something to your unsecured, then you WILL pay unsecured creditors through your plan, in fact, many chapter 13's pay back 100% to their unsecured creditors.

My main question, why do a chapter 13 in the first place. If you only have $13K in credit card debt...what is the situation that is making you think you need to do a Chapter 13. I assume you are letting the house go because you can no longer afford it, and it won't sell, correct?

I think we can be of more help if you fill in the picture a bit, based on the info you have provided so far, it doesn't seem like you need a chapter 13.

[SinkingFast]

Just to help bring everyone up to speed,..........

Daisey's family has recently moved from one State to another.

They still own their old house in IN, which they are currently renting out. They've decided to surrender that home in BK.

They moved to TN where they purchased a "new" primary residence they are currently living in.

That's the 2 houses story.

And to add a bit more spice to the situation,.......... Daisey's Hubby works in MO.

[daisey]

Your good Sinkingfast! She summed me right up! When we lived in Indiana we were on the verge of family failure! My husbands job required him to work many many hours and to be out of the country most of the year. We have 2 young children who hardly knew their daddy, and a wife (me) who was exhausted from playing single parent and lonely from missing her husband! A HUGE pat on the back to those of you playing that roll, it is not easy! He was offered a job here in Tennessee we jumped on it, we did not do enough research, we were under the impression that we could handle both payments if we kept it rented for most of the year. We did not figure paying state taxes in Missouri as a deduction from our income, and we did not figure that we would also be responsible to pay state income tax to indiana for the rental income! OUCH!

THe house in Indiana was on a 100% loan to value loan on what I considered at the time and know now to be true a jacked up apprasial - folks watch brokers they don't care about your or your future just their commision To make the 100% loan to value loan even worse the community - a private one where the house is in is under litigation with the home owners association which has caused property values to drop and it currently has in the range of 250 houses for sale. So the house is not going to sell. WE have renters who are taking advantage they pay when they want and if they want, and are making a total mess of the place. By the time we get them out and find the money to do needed repairs and the travel we are going to be behind in the payments without a doubt. I know we do not qualify for a chapter 7 with our income so we are thinking lets just unload the place while we can and get the headach over with. Its wearing on my mind wayyy tooo much! Thanks for all the helpful advice!

[daisey]

I know they will not sell the house for what we owe on it. I have seen them go in that area for pennies on the dollar so I am sure there will be a deficiency balance. Will this balance be considered unsecure debt on our behalf and included in the amount we have to pay back?

[cherir]

Heads up for you and your attorney - we lived in Iowa, moved to Arkansas in January (husband) and March (me and the kids). Filed chapter 7 at the end of July. House in Iowa never sold and is in foreclosure, discharged through bankruptcy. We were discharged November 14th.

However, because of a vague issue with current bankruptcy law and rules on what exemptions you must file if you move within 2 years of filing, the trustee is trying to disallow our Arkansas home we purchased in March. We obviously gave the Iowa house up and are keeping our Arkansas home. There has been tit for tat going back and forth between the lawyer and trustee, and we have filed both Iowa and Federal (Arkansas allows), and the trustee finally said we should win on the house, blah blah blah BUT is making us go to court and have the judge rule.

Our date was supposed to be November 30th, THEN January 18th, and NOW March 22nd. I may have a nervous breakdown before we get the final answer and nobody seems to care that we don't know if we get to keep our house. Ugh! Yes, we are discharged BUT do we have a house?

Hopefully, your lawyer and your state has case law to help you out in your complicated multiple state situation and will be able to protect your current home.

[daisey]

I am hopeing that since we are going to fileing a chapter 13 this wont be an issue, we also have some medical bills we are going to keep and pay, we use the doctors on a regular basis and I do not want hard feeling with them. We have no equity in this house we are keeping, I cannot imagine them wanting to force us to file on a house that we are current on........that makes no sense if you think about it why force you to give up the house if you are willing to keep and pay for it and the mortgage company I am sure does not want it back.

[cherir]

Regarding the house, I totally agree!! We filed end of July, so we had only owned the Arkansas home 4 months. Even now, 10 months later, there cannot be equity enough for the trustee to mess with this. We have decided the trustee just thinks she has found some money, because most people would pay to keep their home. However, we cannot, don't have any money even if we wanted to pay some money to keep it (trustee seems to want $10,000 and may settle for less) and I think the reason the court date keeps getting pushed out is the trustee is betting we will fold and pay. Well, she better find a comfy seat because we won't be folding. Simply can't. Therefore, if we don't win the court case (our lawyer fully believes based on case law from other states that we will win and become case law for Arkansas - whippee, not), the trustee can have the house, which I'm sure she does not want. After fees, how could she possibly not be writing a check to get out of this house?

I just wish we did not have to have this hanging over our heads. To top everything off, I just had my 3rd back surgery in 12 months, and I really don't need the stress during my recuperation. Ugh.