Disaster discharge?

[brandv1]

I have so many questions and concerns right now that I don't know where to start.

We're in Baton Rouge, and last week our house was flooded (about 17 inches of water throughout the house and no flood insurance because we are nowhere near a flood zone), as well as both cars. One car was included in the Ch 13, the other was paid off. The house was not included in the Ch. 13. Now, we have to rent a temporary apartment. We won't be able to make the house note because of having to rent an apartment. Our washer and dryer are toast, we lost all of our furniture, bed clothes, a good portion of the kids clothes.... basically everything in the house.

I called our atty on the Monday after the flood on 08/13 and it was yesterday before I got a call back. They are talking about amending the plan to surrender the house (which I am fine with - it would cost way too much for us to repair). Of course the insurance on one car will go straight to that lien holder. So, everything is pending insurance and FEMA.

From what the atty was saying, it sounds like we would continue paying into the plan until next October with amended payments. Wouldn't circumstances like this qualify us for a conversion to a 7 or some kind of hardship discharge? Will they take any money we receive from FEMA? I just have so many question and an atty who hasn't given any clear answers.

[justbroke]

First, I am m sorry to read that you are affected by the flood WHILE being in a bankruptcy. Those two things don't mix well.

Your case is one that (luckily) doesn't happen often. I'm sure the Trustee will be understanding and any FEMA money shouldn't count as "disposable monthly income" (DMI) since you are in a disaster and lost so much. If your attorney can surrender the home, that would probably work since you wouldn't be responsible for it any longer. If that's the case, then don't worry about paying the mortgage since it would be surrendered. Your attorney will work on amending your plan and coming up with your new payment amount -- I'm suspecting that it will be less since you now have an apartment expense.

I don't like that insurers will not cover for "loss of use" when the loss is not related to a covered event (like this flood). Hopefully FEMA and other Federal Agencies step in and help with the losses or at least with temporary housing.

As for a hardship discharge you really need to understand what the courts use as a hardship. While I'll oversimplify this and probably make you feel as though I don't believe that the loss of your home and possessions are a "hardship", the courts don't look at that. The courts look to earning potential and ability to pay; not at your particular circumstances in total. A person injured in a car accident that can no longer work could receive a hardship discharge. A person that loses their car in a flood and can't get to work would not receive a hardship discharge (and please mind you that I know you lost other personal items and your home... just trying to paint the picture). Rather than read it from me, some anonymous person on BKForum, please ask your attorney. For all I know, there could be an angle there, but I have never personally dealt with or needed a hardship discharge. I was able to convert to a Chapter 7 just based on my existing situation and DMI.

In the meantime, please take care of yourself and your family. We extend our sympathies for such a horrible disaster.

[LadyInTheRed]

brandv1, I have nothing to add to justborke's comments, but I wanted to extend my sympathy for what you are going through. I was looking back at your previous posts and looks like you have had a rough time during your entire BK. Best wishes to you in recovering from the flood and getting through to discharge, one way or another.

[AngelinaCat]

I, also cannot add any words of wisdom, but I certainly do feel for you and am praying for all of you affected. I will keep my eyes and ears open for helpful news.