Chapter 13

[jakeinTX]

Hello All,

I am not looking for a legal opinion but more of a cathartic rant. I have placed myself and my family in a bad situation.

We show income of:

Base - $60100
OT-$10k (this year but now non-existant at work)
Bonus - $9k (but not guaranteed)
Wifes income $3000/year

Debts:
$51k in Unsecured Debt
$32k in car loans (cars worth about $20k-Truck and SUV)
$138k on 1st Mortgage
$38k on 2nd Mortgage
$12k in Student Loans
$10k in 401k Loans
$3k in Medical debt
$4800 Property Taxes (not behind)

We have 3 kids and two are shaping up to be requiring alot of care.
I am meeting with an attorney on Wednesday to discuss BK options, I am looking at Chapter 13. I don't believe my info will meet a Chapter 7 requirement ($9k bonus and some OT will be over 6 months old, not sure if that will matter).

I want to file seperatley since all debt is in my name. Will Texas allow this?
I would like to keep house and vehicles. I am now at a position where I can no longer even pay the basics of the house along with minimum payments of debt. Taxes will only get paid if a bonus is recieved. What should I be expecting when I meet with attorney?

Thanks
Jake

[rrockinggramma]

bring in all of your bills pay stubbs past tax filings utility bills mortgage and insurance statements car payments etc and know of anything special coming up like medical bills for the children requiring special care or braces upcoming or sports fees upcoming etc.

Then go over the figures with your attorney. He will explain the process

[HHM]

Texas is a community property state, so filing seperately is probably not an option.

[BnkrptcyLwyr]

Note, I am not a lawyer in Texas.

How much is the house actually worth?

If the value of the house is less than the value of the first mortgage (this is happening a lot now in Michigan these days where I practice) then it may be that you can "strip" the second mortgage and treat it as completely unsecured. It appears that the Fifth Circuit (which covers Texas) follows the majority rule that completely unsecured second mortgages can be stripped.

That may make all the difference in a chapter 13 plan.

A piece of advice ... clients always seem to want to keep everything ... be open to the idea of giving up some things and reducing your payments. You need to be able to make it through your case so that you can receive that all important discharge.

[rrockinggramma]

I guess I am highjacking this thread, but my question to the bk lawyer is in Michigan, are all plans start date from the date of confirmation? I was so disappointed to discover that my 36 month mark didn't start ticking until confirmation in Nov of 05. time is moving at a crawl's pace now until I make my last payment in October. So many here have their clocks ticking from the file date.

[BnkrptcyLwyr]

The model plan in Michigan starts from confirmation. I assume that you're in the Eastern District.

And yes, others in other states do start from the 30 day period after filing.

I am of the belief that the law should require that the commitment period begin on the 30th day after filing.

Having said that, there are several reasons why the way it is done in the E.D. of Michigan is not a bad way to go. The biggest reason of all is the following ... those extra payments pre-confirmation will ultimately be credited to your overall plan. And the reason why that is good is because it will increase the likelihood that you have made the total payment you should have made. Say you miss a week of work, and consequently miss a payment. In the other districts, you had better find a way to make that up. In Michigan, those prior payments are a cushion, and you won't necessarily have to make it up. When you're talking a five year plan, I'd rather have the cushion. I'd rather pay a little extra and increase the likelihood of successful completion. In those other districts, there's no room for error. Yes, your creditors will get a little more if you make all your payments, plus the pre-confirmation payments, but that's not such a bad thing when it gives you the cushion you may need. Yes, they do it a little differently in the E.D. of Mich., and I think that "legally" it's not right, but practically, it's more than likely a very good thing.

[newbie2]

The model plan in Michigan starts from confirmation. I assume that you're in the Eastern District.

And yes, others in other states do start from the 30 day period after filing.

I am of the belief that the law should require that the commitment period begin on the 30th day after filing.

Having said that, there are several reasons why the way it is done in the E.D. of Michigan is not a bad way to go. The biggest reason of all is the following ... those extra payments pre-confirmation will ultimately be credited to your overall plan. And the reason why that is good is because it will increase the likelihood that you have made the total payment you should have made. Say you miss a week of work, and consequently miss a payment. In the other districts, you had better find a way to make that up. In Michigan, those prior payments are a cushion, and you won't necessarily have to make it up. When you're talking a five year plan, I'd rather have the cushion. I'd rather pay a little extra and increase the likelihood of successful completion. In those other districts, there's no room for error. Yes, your creditors will get a little more if you make all your payments, plus the pre-confirmation payments, but that's not such a bad thing when it gives you the cushion you may need. Yes, they do it a little differently in the E.D. of Mich., and I think that "legally" it's not right, but practically, it's more than likely a very good thing.

Absolutely fully agree with this post. (I am also in the Eastern District of Michigan).

Here's what happened to us: Property taxes went up, and our escrow was short. Total increase in mortgage payment was around $100 per month. The payment plan did not increase to the trustee because we had the cushion of the extra months. (To come up with another $100 per month would have caused a real hardship simply because of the ever rising costs of gasoline, food and medicine.)

[itneverends]

Absolutely fully agree with this post. (I am also in the Eastern District of Michigan).

Here's what happened to us: Property taxes went up, and our escrow was short. Total increase in mortgage payment was around $100 per month. The payment plan did not increase to the trustee because we had the cushion of the extra months. (To come up with another $100 per month would have caused a real hardship simply because of the ever rising costs of gasoline, food and medicine.)

Well I have to fully disagree. (I am also in the Eastern District of Michigan). My 37, 38, 39, & 40th payment means I have at this point paid in $8000 above and beyond what I thought I was going to have to pay over 36 months. And paying in that extra $8000 has caused a real hardship.

Don't get me wrong, I'm glad it worked out for you, but it sure didn't for me.

[krielly]

I guess I am highjacking this thread, but my question to the bk lawyer is in Michigan, are all plans start date from the date of confirmation? I was so disappointed to discover that my 36 month mark didn't start ticking until confirmation in Nov of 05. time is moving at a crawl's pace now until I make my last payment in October. So many here have their clocks ticking from the file date.

Hang in there hon! Could be worse. you could have filed in Oct 05, like we did, and be in a 5 year plan!!!!!!!!!! wanna switch???????????? lol!

K

[rrockinggramma]

These last 3 months are the slowest of my entire life. LOL Wake me up when it is Nov 3 and I agree, the cushion is nice but I feel that my chapter 13 has accomplished its goal and I can definitely budget now etc so am ready to move forward. And the chapter 13 was worth it. I hope to never do it again!