Considering Chapter 13....questions?

[Amy26]

Hello, I spoke to an attorney about filing for bankruptcy. He did recommend that I do it but I'm still weary of it.

1. When they say the payment will be your "disposable" income ... how do they calculate that? Technically I make good money and can pay my bills with leftover money...but I'm not getting anywhere...27% interest and all that... I'm paying a crap load of stuff now and still have over 1000 left every month... so, will that mean I'd end up paying over 1000 a month in my payment plan?

2. My lawyer said he charges 3500 for the chapter 13... is that a good price? He said I have to give him 1500 upfront before he'll file.

I'm just so confused if I should do this now because I'm getting married in a few weeks and will have to start immigration proceedings for my husband which is also costly.... uggg... so many things at once! I'm mainly considering doing it to get rid of my house that is 150,000 under water.

Thanks!

[optimistic1]

1. The way your disposable income is calculated mostly depends on whether or not your household income is. It is called above or below median, and the tables can be found here.

http://www.usdoj.gov/ust/eo/bapcpa/20090315/bci_data/median_income_table.htm

Once you have determined whether or not you are above or below does change some things, re-post your answer and we will get into that. But for the most part, it is basically your income minus your expenses equals your disposable income. If you are saying that even after you are paying all the bills including the credit cards, that you have $1000 leftover, then not paying the credit cards would certainly raise that extra money leftover, but you need to come up with a realistic budget that covers everything you buy. Use this to help with that, and take into account everything you can think of.

http://www.ca-bankruptcy-attorneys.com/calculators/expense_calculator.html

2. Your fee is reasonable, although feel free to shop around, your fee is exactly like mine. Alot of attorneys I spoke with actually charged about 4k.

3. Some states have laws that may specifically prohibit lenders from pursuing borrowers for the balance of many mortgage loans after foreclosure, though the particulars vary. Arizona and California are among these states. So if you live in either one of those states, then just mail the keys to the lender and do a deed in-leiu of foreclosure instead, it will leave you much more better off credit wise than sticking the lender for months on end until they change your locks and kick you out.

[Amy26]

I live in Virginia... so, they are allowed to come after me.

I am definately way above the mean but only on a base salary level. I have been unemployed since October of last year. I just started getting paychecks at the end of last month. So, my lawyer is actually thinking to do Chapter 7.

I also did a budget of everything that I "should" be paying with cash (right now I end up charging a lot of stuff) and came up with a deficit of 80 bucks a month. Yucky....

[optimistic1]

So with that being said, I would do the Ch.7, if your previous 6 months income shows next to nothing, just quickly relieve yourself of the debt. Everyone has a house that is underwater, I would not worry about it, the value will return, but it will take several years, maybe even a full decade.

[Amy26]

Yea, I'm thinking the same thing. Going in to retain the lawyer tomorrow I think.

I'm actually going to get rid of the house. I'm 30 days behind (and would be forever unless they mod the loan) and its just a thorn in my side. Its a condo and for it to go back up 150,000 would take an act of God. I'm also getting married in a few weeks and I know we would never want to raise a family in it because its only 790 sq ft! So... I think its best to let it go back.

Do you know what will happen to my renters? After I file, should I keep taking their rent even though I'm no longer paying the mortgage? I assume their rent will be factored into my monthly income... so, I guess I keep taking it? I also have no idea when they should get notified... oh by the way, I'm going bankrupt get the frick out lol.