Can you move while in ch 13?

[ccgirl]

Hello-
My husband has an opportunity to get a better job. The problem is we live in MI and the job is in Oregon. His parents live out there so it would be a great move for our family. How does it work if we want to sell our house. We currently have 2 mortgages. (Both are paid outside of the bankruptcy plan). Also, the bk is only in my name. Are we allowed to sell the house and what would that do to our bankruptcy plan payments?

Thanks!

[justbroke]

Hello-
My husband has an opportunity to get a better job. The problem is we live in MI and the job is in Oregon. His parents live out there so it would be a great move for our family. How does it work if we want to sell our house. We currently have 2 mortgages. (Both are paid outside of the bankruptcy plan). Also, the bk is only in my name. Are we allowed to sell the house and what would that do to our bankruptcy plan payments?

Thanks!

So many questions. The first of which is, is the home held in joint tenancy? (Do you both own it together, as is on the deed of trust?) In any event, you'd have to file a Motion to Sell or Lease Property (Sell in your case), by filing it with the Clerk and serving it on the Trustee.

Then you have to wait for approval of the sale. They'll take the proceeds (profits) EVEN IF you are funding your Plan 100%. They will take the money up to a 100% Plan, or all of it... whichever is less. If you are trying to surrender the home, that gets tricky!

On moving, I'm ACTUALLY about to do this. I have my ducks lined up, so I'm getting ready to hear it from the Trustee and creditors. I moved PRIOR to filing and started leasing. Now, I just figured out I can avoid the 2nd lien on my home and make it an unsecured claim. This does two things for me... first, I get my house back (yipee) and second, the creditors get about 1% (which I know they aren't going to be happy as I'll be changing form an 80%+ plan to a 1% plan).

We'll see what happens in my case. Your case is probably easier to work.

Some advice on moving though. You need to SAVE money (if you're not already in a 100% Plan or you have some 401K you could borrow). YOu will have to do this without touching your PLAN money. In fact, your PLAN payments will probably go up.

You need to research the various allowances depending on the county you are in, and the county you are going. There are some unique situations where if you live, say, outside Chicago, but move into the Chicago "county", you could get a lot more, even though not living in the City. (That's just a "planning" example.)

Make sure you work the numbers well!

Good Luck! (Is your lawyer still around?)

[ccgirl]

The house is in both of our names. We are upside down on the house. How does it work to switch the home equity to unsecured debt? Yes, my lawyer is still around. I was going to call him, but it seems like it is so hard to get in touch with him. I think we should be able to save some money up. We are not in a 100% plan. His parents have offered to pay for the move and allow us to stay with them until we find a place. Actually I think that my husband will go out there before us while I am finishing out the school year here.

Best Wishes on your move Justbroke!

[justbroke]

The house is in both of our names. We are upside down on the house. How does it work to switch the home equity to unsecured debt? Yes, my lawyer is still around. I was going to call him, but it seems like it is so hard to get in touch with him. I think we should be able to save some money up. We are not in a 100% plan. His parents have offered to pay for the move and allow us to stay with them until we find a place. Actually I think that my husband will go out there before us while I am finishing out the school year here.

First, if you're giving up the house, this is all moot!

It's called a "lien strip". Your lawyer files a motion in the court alleging that the value of the house (shown by a current appraisal) is less than what the first mortgage balance is. The judge will then grant (or deny) the motion. This means that the 2nd mortgage is paid just like a credit card during your Chapter 13 and discharged when you complete your Chapter 13. Whatever is left over, you don't pay.

So, say your Plan pays 10% to unsecured creditors. Just using some strange math (and let's say it's a percentage and not pro rata -- otherwise there's going to be e length explanation). So since all creditors get 10%, then your mortgage company on the 2nd mortgage would get 10% of the second mortgage and that's it! The lien will be gone. It's all yours. (Well, except for the first mortgage and first position lien).