Chapter 13, divorce, should I convert? Please advise?

[tennessee]

I really hope I can get some guidance here. I can't seem to find anything that helps me online and my attorney won't talk to me without my soon to be ex husband present.

Breakdown: I've been married for 4 years. We bought a house in Tennessee right after getting married. My husband left in 5-06 for 2 months and took all of the money with him. I missed 2 mortgage payments and our house went into foreclosure. Yes, I took him back...I'm not too smart, I know. Six weeks later we filed Chapter 13 to save our house. I had only 6K in debt and he had around 80K, not including the house, so I wasn't sure I wanted to do it but I went through with it because I loved my home.

For nearly 3 years the Chapter 13 payments have been deducted from my husband's paycheck. The garnishment also includes our mortgage payments and the trustee sends the payments to the property owner. In April 09, he revealed that he was having an affair and left, however has been hounding me for the last month to get out and go home to Kentucky so he can have his house back. I cannot afford the mortgage so I have rented a place in my hometown to move back to with my 2 sons. Our agreement currently is that he will keep me on the 13 and he will continue to make the payments until it's discharge in 2 years. I've worked hard to make sure these payments are being made so that I can have SOME sort of repair to my credit report and would like to follow through with the 13. The ex thinks that he can refinance the house soon. I don't know how but I am willing to put in the divorce decree that he CAN refinance in his name only whenever he is able to do so.

The question I have is this...due to quite a few circumstances...I am almost certain he will not be able to keep up with the payments and have now been given some information that he does not currently have which will result in him basically not needing a house this size or at this cost. He also works in the auto industry which has been hit hardcore...I am almost certain he will default on the Chapter 13 payments.

This man has used me and screwed me over financially for years. I need some help to know my best options as I am moving in a few days and I don't know how to protect myself. All of this is beyond my control.

Which would be the best option for me? If none of these are the best, please advise me on what would be best:

1) Should I convert to Chapter 7 NOW...which is the last thing I want to do after working so hard on the 13.

2) Should I hold out and hang in there with him on the 13? MAIN QUESTION: If he defaults at any point over the next 2 years, once the 13 payments are in default, would I still then have the option to convert to 7?

3) Should I insist the house be sold? We have paid 37K on this house (had it on 15 years pay off) and the mortgage was 96K.

[liz417]

Wow, I am so sorry about your situation, what a JERK! It's so nice of him "to keep you on the ch 13"...
Okay, I would dump this loser, find a good divorce attorney and have him contact the original BK attorney. You will probably have to file your own BK petition, dismiss the other BK and let your EX fend for himself by filing his own new BK. His payments will probably increase because he just lost 3 dependents in his household There is no use giving him the "upper hand" and waiting until he defaults on the mortgage, I sorry but I don't know how the BK attorney(s) and divorce attorney will handle things, but you need a Fresh Start with a ch 7.

Best of luck to you and your sons.

[tennessee]

Wow, I am so sorry about your situation, what a JERK! It's so nice of him "to keep you on the ch 13"...
Okay, I would dump this loser, find a good divorce attorney and have him contact the original BK attorney. You will probably have to file your own BK petition, dismiss the other BK and let your EX fend for himself by filing his own new BK. His payments will probably increase because he just lost 3 dependents in his household There is no use giving him the "upper hand" and waiting until he defaults on the mortgage, I sorry but I don't know how the BK attorney(s) and divorce attorney will handle things, but you need a Fresh Start with a ch 7.

Best of luck to you and your sons.

Thanks Liz...Actually I didn't know that about the payments going up because he just lost 3 dependents. I wonder what happens when you lose six? See, we had custody of his 3 children as well. They have gone to their mother's for the summer and will likely not be back. So he will be the only one living in this big ol' house. His children are likely moving out of state. So throughout the last 3 years on the Chapter 13 there were 7 dependents. Now, he will be the only one here unless his girlfriend moves in and helps with the bills. Add child support to his already low auto industry income and I'm fairly certain it would only be a matter of weeks before he is in default.

Everyone else is saying "Convert to 7" also. I didn't want to do that but I do not want to be left holding all of his debt...he is very irresponsible with money. I just wish that I could keep my house but I can't afford it on my own.

I hope someone knows if I can remain on the 13 and convert to Chapter 7 LATER if he does in fact default...

Thanks Liz!

[liz417]

Yes, you can always convert once he defaults, you divorce and you are under the median income for your State. One question, why do you WANT to stay in this ch 13 with him and wait until he defaults?

[tennessee]

Yes, you can always convert once he defaults, you divorce and you are under the median income for your State. One question, why do you WANT to stay in this ch 13 with him and wait until he defaults?

Well, actually I'm hoping he DOESN'T default. Being 3 years into the 13, I have worked SO hard to make up for the payments and to see that everything was financially taken care of with the goal of completing the 13 and being on my way to a somewhat better credit rating. I'm already giving up the house that I loved after we have paid 37K on it...If he is somehow able to pull through with the payments, our 13 would be paid off and within a year or two I may be able to look into buying my own home in Kentucky...but if he defaults, as he likely will, I was just hoping the 7 was still an option for me. With the Chapter 7 it would be so much more difficult to recover my credit rating and buy a new home in the not-so-distant future.

Thanks so much for your help...One more thing I just thought of. Since I am moving out of state, will that make a difference in the 13? Or the 7? Since my bankruptcy is in Tennessee currently?

[liz417]

Well, actually I'm hoping he DOESN'T default. Being 3 years into the 13, I have worked SO hard to make up for the payments and to see that everything was financially taken care of with the goal of completing the 13 and being on my way to a somewhat better credit rating. I'm already giving up the house that I loved after we have paid 37K on it...If he is somehow able to pull through with the payments, our 13 would be paid off and within a year or two I may be able to look into buying my own home in Kentucky...but if he defaults, as he likely will, I was just hoping the 7 was still an option for me. With the Chapter 7 it would be so much more difficult to recover my credit rating and buy a new home in the not-so-distant future.

Thanks so much for your help...One more thing I just thought of. Since I am moving out of state, will that make a difference in the 13? Or the 7? Since my bankruptcy is in Tennessee currently?

Oh, I see. From what I've read on this board, I honestly don't think a ch 7 or ch 13 will make a difference in the future in buying a new home (someone will come along and have more info). Although, a BK will be on your credit for 7-10 years, I've read that within two years, you should be able to qualify for loans.
You can apply for BK in Kentucky provided that you reside there a certain amount of time (I think it's 3 months, but I could be wrong).

Are you under the median income for the State (either Kentucky or Tenn)?

[tennessee]

Oh, I see. From what I've read on this board, I honestly don't think a ch 7 or ch 13 will make a difference in the future in buying a new home (someone will come along and have more info). Although, a BK will be on your credit for 7-10 years, I've read that within two years, you should be able to qualify for loans.
You can apply for BK in Kentucky provided that you reside there a certain amount of time (I think it's 3 months, but I could be wrong).

Are you under the median income for the State (either Kentucky or Tenn)?

I found that the median income for a family of 3 in Tennessee is $53,337...In Kentucky it's around $54K as well. I'm most definitely under that amount.

Thanks again for all of your help!

[liz417]

I found that the median income for a family of 3 in Tennessee is $53,337...In Kentucky it's around $54K as well. I'm most definitely under that amount.

Thanks again for all of your help!

You should be fine Hang in there!

[tennessee]

Wow...I am so ignorant to bankruptcy law. I've been doing some research this morning and I see now that I am not allowed to finance anything while in a 13. I had no idea. At the end of last year our heating/ac unit went out and my husband had heard through a friend that we could get financing for an install of the unit through the electric company. He went mad trying to get it approved and even though we were in a 13 they approved it. The unit has been installed. I seriously had no idea that we couldn't do this. It has been financed in both mine and my husband's names at 47.00 a month for 10 years. As mentioned above, my husband may be taking over the house and of course the unit as well. We've had it for about 7 months. Would this effect my ability to convert to a 7? What would happen to the unit? Have I broken any laws?

[tennessee]

The financing was for around $5,000.

[CH33 Paralegal]

this is trancending just BK law here. You need to go speak with your attorney. For one thing, if you guys are joint and then divorce, you're creating a conflict of interest for your attorney because one of you is going to be a creditor to the other. He may have to withdraw counsel from one of you.

[gunsmoke]

You are married. This is not his debt or your debt. This debt belongs to both of you. File your divorce, reach a legal settlement,then file your 7.

[tennessee]

Thanks everyone. It looks Chapter 7 is my best option. I really didn't want to go that route but I can't see a better one.

[tennessee]

You are married. This is not his debt or your debt. This debt belongs to both of you. File your divorce, reach a legal settlement,then file your 7.

Thanks, gunsmoke...You are right. It is our debt...this next part has nothing to do with bankruptcy law but I am basically being pushed out of my house because he wants back in it and I refuse to spend another night under the same roof as this man....Now I know that doesn't matter to the bankruptcy court though but still it's not a good situation to be in...I'll be fine though, I just wish I could find out other options outside of converting to 7...that seems like the most logical answer but there has to be other options for me.

What if we sell the house? This is what my divorce attorney wants me to do. I actually have an appointment with him tomorrow (the divorce attorney who knows nothing about bankruptcy...UGH). I actually have an associate locally he is very eager to sell it for us and he is asking for only a very small flat rate commission.

If we were to sell, what would happen to the Chapter 13? Could it just be dismissed without further damage to my credit?

[shadowb]

I read this thread and this is quite interesting:

Here is my scenario: Married 21 years. I worked for regular paying job and at the time of our chapter 13, my STBX was working as well. However, prior to that, for years up until hurricane Katrina, he had his own business. He handled money, etc. THis included a serious spending habit which he managed to hide well in addition to his neglecting of the tax debt he had incurred. At the time of the chapter 13 filing, though he was working with regular income, he unknown to me was months behind on house, vehicle payments, other debt and the IRS payment. Our account got seized, and we were forced to file the chapter 13. We are on the five year plan, getting ready to hit our second anniversary. A few days after New Year's, he SURPRISED ME with divorce papers. Now, thanks to investigating, I am finding out quite a few things...one of the things is that he did a lot of misrepresenting of himself with the chapter 13, including while we were going through the steps he was online, with single sites, etc. He also didn't list all of his equipment, machinery, trailers, 4-wheeler, hunting items, portable generator, etc. In addition, after the BK was filed he stashed money and made expensive purchases that I did not know about. The real blow was I found out that he has been having an affair which is what led to his divorce filing. So, in a nutshell, here are my questions:

1. Since the chapter 13 was essentially his doing and he misrepresented himself, is there anything I can do about this. At this point, my entire check is being garnished to pay a portion of our debt (we pay $2100 per month), I have ZERO income to pay expenses. I have both our children with me and have been trying to continue to live in our home. This chapter 13 is killing me.
2. Can arrangements be made via the divorce attornies regarding the chapter 13, i.e.? I noticed someone mentioned this in this thread, regarding they keep the car, husband makes the payments or something like that. We (my attorney and I) have managed to come across very strong evidence of what my husband has been up to, the year leading up to his asking for a divorce (including the affair) and we have also come across everything indicating the reasons we ended up in the chapter 13.

Right now my husband is trying really hard to put me and the children in financial ruins. Any advice on what I can do. Also, we noticed he didn't disclose the above mentioned items. Should I report this to the trustee? Or, should we hang on to the info/knowlege we have and use it as a bargaining thing.