How homes work on a chap 13

[253BK]

Hi everyone we own 4 homes one of which we live in and are current all others are late! We only have about 15,000 in cc debt and need to keep our cars and home has anyone else had this same type of situation???

Any info would be great! We cant file chap 7 due to income being to high!

[253BK]

We are in Washington state if that helps!

[MOMof3]

The housing market is still good for us, can you quick sale out of the three you are late on?

[HHM]

Back-up on the income too high thing....

Are these homes investment property/rentals...I would assume so.

Keep in mind, the median income/means test for chapter 7 ONLY applies when you have primarily consumer debt. If more than 50% of ALL your debt is non-consumer debt (i.e. mortgages on investment property), then you can file chapter 7 notwithstanding your high income.

We have had several members of this forum in your same situation who successfully completed a chapter 7 to get rid of investment properties.

Chapter 13 is not a good way to deal with secured debt when you plan on dumping the securing asset.

[253BK]

Wow really??? I better call another attorney and meet with them then! This is how it breaks down!

I made 147K this year BUT the last of it came in April 2007 I am a realtor in the area and the market went bad and I have been unable to close any new deals!

My wife makes about 4500 monthly before taxes

Overall I think the chap 13 is bad news for us the attorney we spoke with suggested we give the homes back and if the bank is to slap us with a collection/lien we pay it through the court and what ever is left over would be discharged!

What are your thoughts??? I really think we need chap 7

[HHM]

Talk to a couple other attorneys.

You will want to ask the attorney specifically about what happens when your debt is mostly non-consumer debt. Even for attorney's, it is rare for them to have a client in this situation, so many are not intimately familiar with this exception, but if you can find one that is, hire them.

[needarest]

You made 147k this year and own four homes and want to do a Chapter 7. Wow!!

[uofaguy]

253BK,

HHM is absolutely right about the means test not applying to you if more than 50% of ALL your debt is non-consumer debt. You definitely should meet with a few attorneys (and as another poster suggested to me, be sure to meet with one or two that specialize in business BK) for free consultations and search this board for prior postings on the subject.

You & I are in a similar situation and a few of the attorneys I met with were not even aware of the fact that the means test did not apply to my situation. I actually had to pull out an excerpt from the Ch. 7 Trustee handbook to prove it to them - - needless to say, I won't be using them if I have to file. Given the fact that our situations are somewhat unique, I honestly have learned more from this board than some of the attorneys I have met with.

Good luck - Jon

[busbis]

we are in the exact same situation. we have 2 other investment properties and not alot of other debt. we have spoken to 3 different attorneys, but we still did not pass the means test for the chp 7. My household has a combined income of a roughly around 150K, 2 paid for cars, a good bit of equity in our home. We are current on all payments except the hoa dues on the 2 condos. When speaking with the attorneys they advised me if I have means of paying off the 13 early and obtaining an early discharge than the mtg company couldn't come after the defiency bal...that is if it doesn't sell before discharged. But even with a defiency balance they would still have to prove that it was sold for "real market value". All said 99.9% of the time they do not come after the defiency, but there is still a small chance they could come and file a claim. We are paying all other creditors (unsecured) at 100% which totals around $20K.
I am not doing a straight foreclosure for the simple fact that one of the mtg companies is my former employer and I feel they would certainly come after me. I feel alot better doing the bk, plus I work in the finance industry and see people recover from a bk far quicker than a foreclosure.

I'm not sure if I helped any, but this is my experience in speaking with 3 different atty's in the past week. We plan on filing in the next 2 weeks. I am very nervous, but almost have a relief to get all of this behind me.

I would love to hear your experience with your atty's and share any feedback they give you.

[253BK]

Me too Uofaguy! I did make a ton of money this year and invested it in some homes that I rented out BUT lovely renters decided not to pay so I have been making 4 house payments so 147K doesnt last long when its 12K going out monthly!

Thanks for all your help I have a feeling I can get this chap 7 done 'just got to find the right lawyer!!!

[uofaguy]

Apologies in advance for the long post. My situation is as follows:

My wife & I are above the median income level. We bought a few (high $) investment homes in TX, that turned out to be a fraud (broker, builder & appraiser all in on the deal). I, & many others, bought unfinished homes at above market prices. The builder stole hundreds of thousands of $, filed BK, & left a community with unfinished homes that are severely underwater & many going to foreclosure.

I began meeting with BK attys (before I knew of this forum) a few months ago & the 1st atty said there is a 95% chance we qualify for a Ch. 7 (because Congress inadvertantly made it easier on high income filers like us with the passage of the recent law). So, I figured we could file Ch. 7 & move on with our lives.

After finding this forum, I became concerned that maybe atty #1 was wrong - as he had us pay for a means test & I later learned that the means test is not applicable (biz/investment property debt > 50%). Got me thinking that maybe he knew we would be forced out of a Ch. 7 & that is more fees for him at $450/hr.

I have met with 7 other BK attys & all said there is no way we qualify for a Ch. 7 because even without the means test, we still have to submit schedules I & J. The last atty suggested we not file BK but rather, try to negotiate if they come after us for a deficiency judgment. This atty's point was that unless one of our two homes foreclosed before we file BK, our total secured debt is too high for a Ch. 13 (so we would be forced out of a Ch. 7 & our only other option is a Ch. 11 - biz BK that is much more expensive)

At this point I'm in limbo & not sure who to believe. I really don't want to repay others' fraud for 5 years in a Ch. 13. If there is anyway we could qualify for Ch.7 with our income, I would rather do that. My fear is that the banks will come after us for huge deficiency judgments.

I have appreciated everyone's advice. If anyone in a similar situation would like to to communicate via private messages through this forum to swap ideas, I'm game.

[253BK]

Uofguy where did you find the form that you showed the attoerny??? I think that I need one to show who ever I hire! I think the chap 7 is the only way to go with 4 homes!

Let me know! Thanks for all your time everyone!

[uofaguy]

253BK -

Here is a link to the DOJ site. It is the first document (3/2006):

http://www.usdoj.gov/ust/eo/private_trustee/library/chapter07/

By the way, even though the means test may not apply, the attorneys I have met with have said that we still have to complete schedule I (a statement of monthly income) and schedule J (a statement of monthly expenses). I was told by the attorneys I met I with that given our income, we could not do a Ch. 7 (based on having leftover income between our schedule I and allowed expenses on schedule J). However, I believe others on the board have said this is not true. I'm confused!!

[253BK]

That makes 2 of us! The differant is my wifes income just gets us by and mine is so hit and miss! I am going to get this to someone soon and see wht I can find out!

Thanks for all your help