Need opinion for Chapter 13 in Texas

[texasgal]

I just really could use some of your expertise and experience. I have talked with three different attorney offices about our situation and have been given three different opinions. This is our "issues" in a nutshell:

1. Would be filing Chapter 13 in order to place mortgage payment arrears of $6,000 and keep home. This is the result of trying to do a loan modification with Wells Fargo before payments we late, but when income reductions started.
2. Car loan and car lease current.
3. Unsecured debt approximately $50,000 (Not paying anymore).
4. Boat payment current.
5. Our monthly expenses are $5,649.22 and our net monthly income will now be $5,783.06. (Husband just got new job that will increase income).
6. Could possibly inherit a large amount of money from elderly and infirm family member within the year.
7. Dependent son in fist year of college and will need student loans.

The first lawyer that we talked with stated that we would be agood canidate for Chapter 13 and we should be able to keep all our assets including the boat as long as we paid into our plan the equvilent of the amount we would be paying on the boat. They also wanted to include the car payment in the plan in order to get the interest down. The car is a 2007 and the loan is only 12 months old.

The second lawyer stated almost the same, except wanted the car and lease to stay outside of the plan.

Does any of this sound right to you? Also all three seem to think that we ahd sufficent disposible income to support the plan. Also, how would the student loan and inheritance situation come into play?

[optimistic1]

Yes your income does sound sufficient to propose a plan. The second lawyer may just have looked past the fact that you can cram down the auto loan and put it into the plan.


The inheritance may become part of the bankruptcy estate and may be taken by the trustee. I would weigh your options.

See,

http://www.************************/...in-bankruptcy/


The attorney's sound correct, but I would choose the one that wanted to cram down your auto loan, they seem more in touch with the lingo of a Chapter 13.

The student loan should not have any effect on your filing, while he might live in your house, he is not on the bankruptcy petition.

[texasgal]

How exactly does the cram down work? The attorney did not think we could change the loan amount since the loan was only 12 months old, but we could reduce the interest. Does that mean that I would pay a reduced payment directly to the loan company or would it be part of the trustee payment?

The inheritance that we would be receiving would be larger than the whole bankruptcy amounts. Would we than be required to pay it off? The estimated unsecured debt included late charges and interest.

One other complication, we have a loan with a balance of $6,000 that is gauranteed by a family trust. Would this just be lumped together with the unsecured debt or can it be paid outside of the plan?

[rrockinggramma]

you wouldn't be actually cramming down the car that is only 12 months old. What is being recommended is that by including this vehicle in your plan, the finance company can only file a claim for the principal amount owed. No interest, penalities, or fees. Now the trustee will decide what interest rate the finance company will get (mine was set at 6 percent by the trustee) so in that regard, you are really only paying the principal owed on the loan so in essense saving money that way. if you keep the car outside of the plan then your expenses are effected and your disposable income may be less meaning that your trustee payment is less but you end up paying the WHOLE amount on your newer vehicle.

Student loans are included in chapter 13 plans and they are treated as unsecured creditors. The student loan people will file a claim and the trustee will pay them the same percentage as other unsecured creditors. However your loan company will continue to collect interest while you are in your chapter 13 even though the loans are considered "suspended" for the duration.

And the same situation goes for the boat as well. The financing company could file a claim for principal only and get the same interest as determined by the trustee.

whether in or out of the plan will be personal perference. Your credit report will show all loans as Included in Wage Earner Plan and no additional payments will be recorded as on time or otherwise.

[optimistic1]

sorry, like a fool, I did not read everything, or read it too fast, one of the two. Good reply rrockinggramma, couldnt have said it better than that, especially with you having personal knowledge.

[texasgal]

Help with Form B 22C

If I am understanding rockinggrandma correctly, the boat and the car (Principal) would be included in the plan at a much reduced interest rate?

If this is the case, do I include them in Subpart C of the B 22C form? This is where I state all future payment on secured claims. I am assuming that I do not, but instead include it in the calculation for the debt payment? Both lawyers stated that the boat could not be used to determine means.

How do you handle a creditor account that was used to purchase furniture, electronics, etc? Is this considered secrued or non-secured? We owe very little on this and would like to pay it completely.

Lastly, (I think??) what is the calculation of the trustee administration fee based on? Is it based on all debt including unsecured or only that which will be paid within the plan?

Thanks for all the help! I really wish to be prepared and informed to make a qualified decision on the right attorney and plan.

[rrockinggramma]

the trustee sets is own percentage and it varies from trustee to trustee and district to district. It has nothing to do with your plan. However it probably will go up and down throughout the plan so the attorney will allow for that fluctuation in the plan. I am not sure where you list the boat and car payments. Others here to actually filled out their forms can help with that part. My attorney filled out everything I just handed him the stuff in a bag.

as to the electronics and the furniture, there has been much debate here. I think you just list them in your list of creditors and indicate that it was furniture, computer, tv etc and let them file the claim. Most will file as unsecured although some here have stated that their claims came in as secured. My furniture etc was all done as unsecured.

[optimistic1]

I was always expecting the electronic store credit card account to come hounding me with the security interest mumbo jumbo, but I never got a call about it at all, it went to third party collections which I promptly DV'ed.