Ready to File Chapter 13...Question DI

[Tahoe07]

Quick Glance at my Situation,

I'm ready to file a Chapter 13, mainly to prevent foreclosure and auto repo. Current money owed >>

Mortgage 24,000
Auto 21,000 (Upside down by 8,000)
Back Property Taxes 1,600
Credit Cards (4) 7,000
Old Medical 4,000

House Pmt. 483.00
Car Pmt 520.00

I'm currently 3 months behind on my mortgage as of May 31st, and will be 2 months behind on my car payment as of June 16th, I havent paid on 3 of my credit cards for the last 3 months, Iv'e been doing everything in my power to catch up on my home and auto, but just can't seem to get there. Late fees make the credit cards a losing battle. I get paid every 2 weeks, I have about $ 45,000 in my 401K but was only allowed to take $ 463 out for hardship withdrawal because your only allowed a certain %. I paid out 5,000 last year to pay off 5 other credit cards, but owe a portion of that back to my parents. I know these numbers are low compared to some people. I make about $ 61,000 a year. Take home pay ranges from $ 2500-2900 per month net. My hours were recently cut and reduced my monthly income by about $ 450 Questions >> Would I have any problem getting a Chapter 13 approved, how long would it take for the automatic stay to be put in place, days or weeks ?? What would my monthly plan be ?? I guessed it at around $ 950. Does that sound about right ?? And how long would the plan last based on these figures ? 3 or 5 years Any response would be great, I'm very curious about how they will handle my case.

[lrprn]

Welcome to BK Forum - glad you found us!

Auto 21,000 (Upside down by 8,000

Help us understand why you are fighting so hard to keep an auto that's worth $8K less than you owe on it?

I'm currently 3 months behind on my mortgage as of May 31st,

Have you heard from your mortgage company yet about starting foreclosure proceedings? If you haven't, that's likely not far off.

and will be 2 months behind on my car payment as of June 16th,

Get everything you want out of the car now because after two months most auto lenders will turn you over to the repo folks. They will snag the car anywhere they can get to it without damaging property.

Questions >> Would I have any problem getting a Chapter 13 approved, how long would it take for the automatic stay to be put in place, days or weeks ??

Anyone can file Ch 13 as long as they meet the requirements - sufficient disposable income to support the plan and debt is not over the maximum allowed limits (you don't appear to be over the secured or unsecured limits). Once the Ch 13 is filed with the bankruptcy court, the automatic stay goes into place that day and stays in place for the length of your plan. After successful discharge, all unsecured debt that hasn't been paid through your plan is wiped out.

What would my monthly plan be ?? I guessed it at around $ 950. Does that sound about right ??

There's no way to guess. You won't know exactly what your disposable income will be that determines your monthly Ch 13 payment until an experienced Ch 13 lawyer completes the required Means Test and Schedules. That's because there's wide variability between bk districts, courts, even individual Ch 13 trustees about what's allowed and how much is allowed for expenses. You need local legal expertise to know how things are going to go in your local court with your local Ch 13 trustee.

And how long would the plan last based on these figures ? 3 or 5 years

The only Ch 13 cases set for three years are for filers that are under the median income for their family size in their state. You can check for the median income by family size for your state here - http://www.usdoj.gov/ust/eo/bapcpa/2...come_table.htm Are you under your state's median income for your family size? If you aren't, then you will very likely have a 5-year Ch 13 plan.

If you haven't done so yet, it's time to set up 3-4 free initial consultations with experienced bk lawyers in your area. You'll find out a great deal about what's going to be possible in your situation and if there are any potential issues in your financial situation that could cause a problem if you file.

Hang in there - your current stressful financial situation can be turned around. You've made a first great step by coming here to get information. We're here to help make your journey easier any way we can.

[Tahoe07]

Thank you for your reply, I was mistaken about the (upside down by 8,000) it's more like 5,000. I guess the reason I want to keep my car is because it's my only car, it's new, also I don't know how easy it would be to obtain another depedable vehicle once my chapter 13 goes into effect, all dealers would charge me a very high interest rate if they even approved me to begin with. I will make sure that the auto does not go 2 months behind. Question...is it common practice for the lawyer to try and reduce the totals owed to each creditor ? And if so, does that include my auto loan ? I heard chapter 13 is an "interest free" plan. I'm not sure what that means. Thanks

[optimistic1]

At 61k per year, unless your household size is large, you most likely have a 5 year plan. And here is my unprofessional breakdown on what you need to pay into your plan, based on your figures.

Mortgage arrears 24,000 @ your mortgage interest rate, I am guessing 7%
Crammed down auto 16,000 @ 6% interest
Back Property Taxes 1,600 @ 6% interest
Attorney Fees 2,500 @ 0%interest


Your grand total is $44100, of which you need to multiply in the trustee fee, lets say it is 10%.

You need to take a look at your state bankruptcy exemptions, and determine if your assets exceed these exemptions, if they do, you need to come up with a dollar amount, because that would also have to be paid into your plan. Example, your state exemption for personal property is $4000, yet you have $6000 in goods, then $2000 needs to be paid into your plan to go towards paying the unsecured creditors some money.


You have proposed a Plan that offer the following Plan payments to the Trustee over months.

Months 1 through 60 you will contribute 950 per month for a total of $57,000.00.

Number of Months: 60 Total of Plan Payments: $57,000.00

From these monies, you have proposed payments to creditors as follows

Order Payment Purpose Principal Payments Interest Payments Total Payments Month Paid In Full
1 attorney $2,500.00 $0.00 $2,500.00 3
2 arrears $24,000.00 $2,775.46 $26,775.46 35
3 car $16,000.00 $3,862.88 $19,862.88 58
4 taxes $1,600.00 $475.83 $2,075.83 60
Trustee Fee $5,700.00 $5,700.00
Totals: $49,800.00 $7,114.17 $56,914.17


Your proposed Plan is Adequately Funded.


Your $950 a month figure for 60 months covers it, so you can safely say that you are close to what you might be paying.

[Tahoe07]

Thank you so much for your reply, I will let you now what the attorney says, I have my first meeting with them on June 4th.