Help again, what a mess!

[Needsomerelief]

OK, I have finally decided to do a Chapter 13. Help anyway you can.

History: Wife has not been working, just had a baby, she is going back to work after Christmas. We have about 48,000 equity in the house after the 1st and 2nd mortgage. We have 1 car that is secured, I have a car with about 5,000 equity that is paid off, and two old vehicles that barely run, worth maybe 2,000 total. Have about 65,000 unsecured between both of us. All my CC were caught up until I saw that one raised my APR from 8.9 to 22+, made me very angry, I had never been late always paid more than I was suppose to, they said I had too much debt(WOW) they will not work with me and don't care, so I have decided not to pay them and do the Chapter 13. (Funny how these CC push you further in the hole when you are trying to pay them).

Anyway, my wife has not paid her CC in about 5 months, so it was time to do something. Last time we went to the lawyer, the plan was going to be about $900 month, but what I don't understand is, after the secured creditor payments and living expenses, we have negative disposable income, or it might could be tweaked to break even or have at the most $100 disposable(thats playing with the link to the means test). Also, we fall below the median income for NC with a family of 5! (10,000 below). How could the paralegal say we had to agree to $900 month. Guess it would be possible working some side jobs and might have to do that, but I remember paralegal saying something about the EQUITY in your secured assets is used also to base how much your payment will be????

Can someone explain all this to me, so I will have a better understanding after I meet the paralegal again, because, I'm going to save some money and hold my CC off, then file, i'm just tired of that one ripping me a new one, I need some relief, plus my wife is already in the red.

Main thing, I must keep the house, and can we choose to pay a Ch. 13, even if the payment is higher than disposable income? Seems thats what the paralegal was saying the last time we talked about the 13. I was considering the 7, but too much risk on losing the house. Knowing my luck, I won't even be able to do a 13 or 7

At least me and wifey CC are totally seperate and in my state, they can't attach a lien because of tenacy by entirety and wage garnishment is not allowed except with taxes and child support, so only judgements would get me or her.

Total unsecured debt between us, including medical is 65,000-70,000.

Thanks for any ideas.

Ch. 13 here I come

[JollyGG]

Mabey I missed it in your post, but, what state are you in?

How much do you owe on the secured car loan? and how much is the car worth?

I'm guessin that what the paralegal was talking about was this. A creditor cannot get less in a Chapter 13 plan than they would get in a Chapter 7 plan. Therefore if the trustee could liquidate $54,000 in non exempt assests from your Chapter 7 bankruptcy they would have to get at least that amount from a Chapter 13. $54000 / 60 months = $900 per month.

When I add up the equity in your assets you mention I get $55,000. However a portion of that would be exempt, based on the state you are filing in. Therefore I'm still missing something that would have you owing $900 per month. Do you have other assets you haven't mentioned?

Hopefully someone with more experience will chime in here. I'm just basing that on other posts I have read.

[Needsomerelief]

I'm in NC, maybe that is what paralegal was referring to, but, do exemptions not apply if they are using equity. 48,000 equity in the house, wouldn't we still get the 37,500 exemption, so the trustee would only get 10,500 in a chapter 7??

Why does mine have to be soooo complicated

[HHM]

Perhaps the calculation needs to be tweaked, but essentially Jolly is right, the creditors must get at least what they would get in a chapter 7...but that does mean you subtract the exemptions. So, if you have $48,000 in equity, and the exemption is $37,500, then yes, the amount would be $10,500. Remember, for a chapter 13, many of the expenses are capped by the IRS tables as well.

Perhaps go visit another lawyer, and get their opinion.

[aa06a47]

NC homested exemption is 10K, so that would put you at 38K payback, 1500 exemption for vehicals means 5500 payback. = 43.5k backback / 60 months = about 725 / month. I would say if you are able to exempt everything else you own, your still looking at 725/month. This is probably cheaper than your CC payments. I would look for another attorney. Unfortuantly, your equity puts you in a bad spot as far as bankruptcy goes, unless your willing to walk away from it.

http://www.totalbankruptcy.com/state_exemptions_north_carolina_summary.htm

[Needsomerelief]

The exemptions went up to 18,500 per spouse in NC for those that file after 1/1/2006, just thought I would point that out! So hopefully once I get back up with the lawyer and discuss my Chp. 13 options, payments will be much cheaper.

Here is the link.

http://www.ncbankruptcylawyer.com/faqs.html

[quietsound]

ok, how much of all this mess is JOINT............how much of this is individual unsecured credit.
I know in Virginia, if you file jointly and your married and you have a house together jointly, and if your house is deeded..........tenants in its entirety. that means that legally, you ONLY pay back your JOINT debts. JOINT unsecured debts. the individual debts they cannot take your house on this at all. for instance in our case.

We have a secured car loan for 21k however, it's worth 13k, THAT's what we are paying on 13k...........total credit card debt.....joint, unsecured joint and indiviual is $100k............however $20k of this is joint unsecured credit with a car loan of $13k added in to the 20k. this will be paid back in a 5 year plan at 100% because we are able to do that, we don't go through the means test. the unsecured individual debt which is the bulk of our debt , the creditors cannot liquidate the house because of the tenants in its entirety. however, we will offer them 1% of the balance owed. that's only because we were able to pay the 100%................what i don't understand in your case is that you do NOT have to pay back 100% of your secured or joint debts IF your income doesn't allow it. some people only pay back a percentage. I just wonder if you should see another lawyer, I mean I saw two different attorneys and i shopped around. i would not take the word of a paralegal. shop around