Help- Ch 13 dismissal payments made to plan

[waderaces427]

I have been so frustrated over the circumstances that have left my wife and I without the ability to acquire financing. Here is a brief overview:

2009 -ch 7 discharge including primary and all rental properties reaffirmed nothing.
2013 After multiple attempts at govt programs to save our home, harp, short sale bank declined all attempts. We filed for ch 13 to save our home using an attorney filed 6/13. We had 720 credit scores but really wanted to stay in our house. We made payments to trustee on time for three months per the plan. Then received a letter that are case was dismissed?!! The reason for dismissal was the bank added back fees, interest, attorney fees to primary residence mortgage balance which put balance at 936k and I jointly owned (not with spouse) a property that was included in Ch 7 but bank did not possess yet so that figure approx. $265k was added to my debt. At the time of filing we had re-established credit with credit cards with low balances $100-200. Bankruptcy trustee said our debt exceeded the limit which was the cause for dismissal. We called trustee to no avail and the filing attorney would not help either. Do we have any recourse? Thanks for any help.

[justbroke]

Yes, you could convert to a Chapter 11. Many attorneys use a program known as BestCase. I know that BestCase will actually perform the 11 USC 109(e) check (which is the section of code which limits the total amount of debt in a chapter 13).

Was the $939K property actually discharged in the Chapter 7? Then it does not count because you owe no money. I don't know how this came as a surprise because they will usually file a Motion to Dismiss (or Convert) under 11 USC 109(e) and you would usually object and/or go to a hearing.

Someone may have goofed somewhere if "all" your properties had previously been discharged in a Chapter 7 prior to the Chapter 13. Previously discharged debt simply does not count towards your 109(e) limits.

Let me add that if this actually occurred in 2013 or even anytime between 2013 and 14 days prior to the date of this post (about April 7, 2017), you have no recourse. You would have filed a Motion for Reconsideration and maybe even appealed the final order of the court. Then you would have walked the court through the story of how a (previously) discharged debt could not become "unsecured debt" for purposes of 11 USC 109(e).

[waderaces427]

Thank you for the reply. Yes, the $939k property was in the Ch 7 2010. My wife and I are hoping to be able to acquire a mortgage after the $939k property is 3 + yrs since deed was transferred which is this August. We spent so much money on attorneys fees and the like in the last 8 yrs. Unfortunately, the "goof" probably cost us the opportunity to save our old house. Thanks again for the advice.

[justbroke]

Best wishes on your purchase! I'm guessing that you were looking at a property value which exceeded the FHA mortgage limits for your county and State. FHA had a program that looked more favorably at bankruptcy-driven foreclosures (removing the seasoning requirements). That program has ended (Back to Work program) and it was plagued with lenders adding their so-called overlays making it difficult to find a lender that was participating.

I must take note of what I noticed earlier. You registered in January 2010 and this was your first post. You must have had a "quiet" bankruptcy, so I hope it was otherwise worth it.