Is it too late to chg my mind?

[dmc-2008]

Thank you so much Lady! I am waiting for an appraisal referral from my attorney and today when I asked about it he said, we will do it AFTER I file. I thought that was kind of weird. I mean. The market value to what I own on the first is pretty close. What if the appraisal is right on or very close, couldn't that kill my plan?

Again, thank you so much. I appreciate your replies!!!

DMC

[LadyInTheRed]

I am already confused! He said they strip the second and third. So i assume that not getting paid? Then he said his fees get paid first thru trustie. Then who gets the balance? I assume ccards and that the trustie will go over all that? Its about 400.00 a month does that sound normal and when do you see it in writing? Also need to get place appraised first.

We can't tell whether $400 is normal. There really is no such thing as normal when it comes to a plan payment. No plan is the same. All of your disposible income (gross income, less required deductions and necessary and reasonable living exepnes), must go to your plan. The payment must be enough so that over the life of your plan, it can pay all of your attorney fees included in the plan, arrears on secured debt (but not your 2nd and 3rd mortgages if they are being stripped) and the trustee fees. If you have any non exempt assets, your unsecured creditors will also have to receive at least the value of your non exempt assets. If you can't show that you have enough disposible income to cover all of that, your plan will be rejected as not being feasible.

When you strip the 2nd and 3rd lien, they will be treated as unsecured debts, just like your credit cards. Unsecured creditors are the last to get paid. Your monthly payment will go to pay attorney fees, trustee fees, and any mortgage arrears on your first mortgage that exist on your date of filing. It might also include the regular monthly payment on your first mortgage, your car payment, if any, and any other ongoing secured debt payments you have. Whatever is left over after making those payments gets divided among your creditors who file valid unsecured claims. (Note that my list is not a complete list of what could be included in a plan payment).

Ask your attorney what is covered in your plan payment and what you will have to pay directly. It is very important you understand that. The plan will be an attachement to the petition that you will sign. Review it carefully before you sign it and ask about anything you don't understand. Don't be rushed into signing.

I assume ccards and that the trustie will go over all that?

Don't expect the trustee to go over anything with you. That is your attorney's job.

[dmc-2008]

I am already confused! He said they strip the second and third. So i assume that not getting paid? Then he said his fees get paid first thru trustie. Then who gets the balance? I assume ccards and that the trustie will go over all that? Its about 400.00 a month does that sound normal and when do you see it in writing? Also need to get place appraised first.

[SMinGA2]

From LITR: Just make sure you understand the plan your attorney prepares and ask any questions you need to ask.

Best quote ever. This is the most important detail of a successful ch. 13. That you understand what you're paying, what the plan is paying, and why.

[dmc-2008]

Congrats Lady almost half way!!! I feel like i have so far to go but will be in such better shape in 5 years! Such a long time but I have to look at it as the only way to save this investment and our home! I dont want to give up even if it is too small, you cant beat the neighborhood and the convenience. I have so many questions!!

[LadyInTheRed]

I bet the fees are at least twice what the Chap 7 fees were. My attorneys fees were the best money I've ever spent! So far, I haven't heard of anyone paying more than me for a Chap 13. It's still a bargain compared to the amount of debt that will be discharged.

There really is nothing to be afraid of. Just make sure you understand the plan your attorney prepares and ask any questions you need to ask. When you go to sign the petition, if you are shocked by the plan payment, take the time to make sure you are really doing the right thing and that you can handle that payment. You are right that a Chap 13 is a great way to learn to live within your means. I just sent in payment 28 of 60. There have been some bumps along the way, but overall, things are getting better all the time. I'm almost half way there and the time has sped by.

[dmc-2008]

They want more. Naturally, LOTS more. OMG. Its not too late and I am going with it. It will be a TIGHT 5 years, but I guess this is one way to learn to live within means. 2nd and 3rd stripped, CC debt gone. But somehow, I feel scared instead of relieved. At least I have a roof over my head and I don't have to go out and try to find something. At the end of the 5 years I will be better off. Not under water, no CC debt, and having learned at my age finally to live within my means. But I am so scared. Universe help me and my kid get thru this unscathed!!!! At least not too bloody!

[tobee43]

What is DMI? I meant to ask that! Thanks. I paid attorney already i hope they dont want more!

DMI= Disposable Monthly Income

[pamkev]

Disposal Monthly Income money left over after all bills are paid

[dmc-2008]

What is DMI? I meant to ask that! Thanks. I paid attorney already i hope they dont want more!

[LadyInTheRed]

Is filing for chap 13 harder and more time consuming for law office?

Yes, so expect a higher fee. But, you can include part of the fee in your plan while most attorneys require you pay their entire fee before a Chap 7 petition is filed. You may not have to pay any more upfront in a Chap 13 than you would pay for a Chap 7. If you file a 13, you don't have to pay the mortgage arrears before you file. It can be included in the plan. So, you could use some of that money you are saving to pay your attorney.

Paying the arrears before filing might reduce your plan payment (depending on what your dmi is). But, with California's wildcard exemption available for cash, it may be better to include what you can in the plan and keep the cash cushion in case you need it later.

[dmc-2008]

Is filing for chap 13 harder and more time consuming for law office?

[dmc-2008]

I have been putting $$ in bank so i can bring first to current but nothing else. Talking to my attorney later, will post

[LadyInTheRed]

Thank you lady and all! Yes my first is under or just at market! So i think that qualifies a strip?

As long as the value is not even one penny above what you owe on the first, you would qualify to strip the 2nd. Because the value is close, you could be at risk of the bank objecting to the strip in which case you would have to convince the judge that your value is correct.

I have refied.

If the first is a result of the refi, you could be liable for a deficiency if you keep the home in a Chap 13 and decide to walk away later. Talk to an attorney about CA law regarding deficiencies on a refinanced loan on a personal residence. A mortgage on a primary residence is not discharged in a Chap 13.

Yes it saved me $$ but the second and third still sit out there! Killing me! They put my mortgage over the top.

There's a third too? That can also be stripped. Even you found out you could not strip the 2nd, you could strip the 3rd if the value of the home is less than the total owed on the 1st and 2nd.

You really do need to sit down with an attorney to discuss your options. Don't make any decisions until you do that. We can tell you what options might be available, but we can't tell you what is best for you.

[SMinGA2]

Since you have not yet filed - this is the ideal time to consider all your options and ultimately decide what works best for you. Discuss with your attorney, to see if you can put together a valid plan for a 13. Things to find out: what MUST be paid off in the plan? If you do this with the intent to keep your house, you must pay your mortgage arrears in full on the 1st. Also figuring out what you actually owe (as of now, total) on your 1st and what your home is actually worth - to determine options on the 2nd, 3rd. Step 1 is can you form a valid plan, step 2 is do you want to? If your mortgage arrears is so much and DMI is too little to actually make a 13 work, you can eliminate that option and see what choices remain.