forced into a 13...some questions...

[mickeysfriend]

We have been anticipating filing a 7, but found out today that in order to do that we need to wait a few months and we just dont have that time.

My husband is paid on commission ONLY and his income varies, especially with the economy the way it is right now. he's in the lumber industry. His income is about 1/3 this year to what it was a year and a half ago... it's very uncertain right now.

Also, my dd is a senior this year. she will be going to college next year.

Sooo, if we file for a 13, how is our payment determined? Will it go up and down with our pay? What if our income drops even more in the next year? will they take that into account? When dd goes to college next year will they take that into account?

also, I understand that our tax refunds will go to the trustee. does that go towards the paydown and will that lessen the number of payments we pay?

I feel clueless today.

[PoGirl]

My understanding is that if your income goes down and/or your expenses go up, you will need to contact your attorney so he or she can file an amended plan.

I do not know if tuition is an allowable expense. We were told it was not, so be sure to double-check that with your attorney.

I'm in Texas and was told anything over $2,000 in a tax refund would go t the trustee. I don't think it goes toward decreasing the overall balance, but instead increases the amount paid to the creditors. Someone please correct me if I'm mistaken.

[mickeysfriend]

hmmm, i wonder if the tuition factor is different in different states? I'm in Oregon and my attorney today said if we could wait until August/September to file that her tuition, books, etc would count and could help us get into a 7, we just cant wait that long

[PoGirl]

Could be that the tuition rule is different. Definately worth checking into!

Is there a reason why you can't wait until next year to do the 7 instead? If I had an option to do a 7 over a 13, I'd try to make that work.

[mickeysfriend]

I would MUCH rather file a 7. I really would. but, we have 2 demand letters on our cars...pay or turn them in. the mortgage company is threatening foreclosure. so, even if we wait, we still may not qualify for a 7 because we wont have any of those 'bills'

[Runtime Error]

ugh, your really up against it.....I'm unclear as to what the rules are regarding filing a Ch. 13 and converting at some point to a Ch. 7, but maybe that could be an option? The only thing I am clear on with regard to converting is that you disposable income must be such that you cannot make the Ch. 13 payments....which judging by your limited posts may be the case if the tuition and such is included as an expense......

the only other thing you'd need to worry about would be whether there is enough equity in your home that would exceed your state's homestead exemption. However, in today's economy, I think its harder to find any homes bought in the last five years that have any equity whatsoever.

The bottom line. work with your attorney and let him advise you as to the best course of action. It sounds to me as though your only option at this point is to file the Ch. 13 to save your assets and get you back on track.

[mickeysfriend]

We really have no or VERY LITTLE equity in our home.

I dont get how the homestead exemption works.