what happens now?

[mickeysfriend]

we filed our chapter 13 on October 30th. We were set up with a budget that we felt was comfortable, as long as my husbands salary stayed where it was. He is in the lumber industry and on commission. As we all know, the housing market is nearly dead right now...so is the lumber market

His pay in January was 1/4 of what we needed. This month it is about 1/2 of what we need. It's not likely to go back to what it needs to be for quite some time. Needless to say, we couldnt pay our mortgage payment in January and wont be able to again this month. The mortgage companies wont talk to us until we have a letter from our attorney.

Called our attorney and they want me to send them some info so they can see if our payment can be reworked and lowered. I'm not sure it can be lowered enough.

SO, what happens if our house is foreclosed while we are in a 13? What happens if they use our current income to adjust our 13 payment, and then our income goes back up? will we always be adjusting?

We were feeling fairly good about our 13 situation until now! ugh.

[rrockinggramma]

if your house is foreclosed, then after the sale etc the remaining amount will become unsecured debt. It may take a modification of your plan. I am sorry that you are going through this. I think it will be the way it is in 2009 for many many people. I wouldn't jump to move or anything right away. But keep your attorney informed and know the foreclosure laws in your state to see how long you have after the sale before you move out. Start looking for another place that you know you could afford.

[Flamingo]

You may not now be able to afford the house. Sit down with your attorney and see if a modification of your Plan is possible. A Chapter 13 plan cannot be made on guesses if your income will rise in the next several months or go down in the next several months. Income can be averaged out but no one can guess if one's employment sitiuation will get better or worse. Work with your attorney and see what is the best option for you.

[mickeysfriend]

Thanks!