Parents need help

[galmazan]

My parents are planning on filing Chapter 13 BK. They live in San Diego, CA

One of the reasons they are filing or thinking about filing is that Chase Credit raised the monthly payment X2 (from 300.00 to 750.00), and now they cant afford THAT payment.

- They have a house w/ 2 mortgages (1st - 193,000, 2nd - 81,000, and payments are about 2000.00 a month). I believe their credit cards are between 30,000 - 40,000.

- They want to get rid of their 2nd mortgage.

- Being elderly, they live on a fixed income (2000 - 2500 a month i believe)

- They are thinking about using their credit card for cash advances to pay for the atty. How much do you think, in the eyes of the court, would be too much?

The family helps them with paying the utilities (gas, water, cable, etc), and also give them about 400.00 a month.

My question is, would they have to report the monies given to them by the family for utilities, to the trustee?

If there is anyone out here in San Diego, CA that went thru this, can you tell me "roughly" how much the fees would cost.

Thanks

[falken]

How much is the house worth? It needs to appraise for under $193k to be able to get strip the second mortgage in a 13.

Getting a cash advance to pay the attorney fees is one of the biggest no-no's you can make. If you make a charge or advance on a credit card once you know you are going to file it is fraud, if you are getting an advance to pay the BK attorney that is about as guilty as you can get.
They need to stop paying the credit cards and save that money for the attorney fees.

Yes, if they are given money by family to support themselves that is considered income.

[falken]

If the house does not appraise for less than the balance on the 1st mortgage, it sounds like a chapter 7 would be a much better option.

[galmazan]

Thanks for your response.

If they file under chpt 7, they would still be paying close to 2000.00 a month for both mortgages, and their monies would still be tight.

[Tbornetun]

It sounds like their money would be tight anyway even if they were able to strip the second mortgage. I have my doubts about them being able to show they have disposable income to support a Chapter 13 plan at all if their fixed income is only around $2500.00.

Mom and Dad might need to think about whether or not it is worth keeping a house they can't afford. It is sad I know, and I don't mean to seem harsh, it is just reality.

[AngelinaCatHub]

It sounds like their money would be tight anyway even if they were able to strip the second mortgage. I have my doubts about them being able to show they have disposable income to support a Chapter 13 plan at all if their fixed income is only around $2500.00.

Mom and Dad might need to think about whether or not it is worth keeping a house they can't afford. It is sad I know, and I don't mean to seem harsh, it is just reality.

It is not harsh. It truly is reality. They are way over their heads and the kids cannot help them without themselves becoming fixed into the spiral of doom. The folks best bet is to unload the house if they can, plan on a smaller house even in another state. The figures do not lie. C7 would not help them keep the house and its upkeep. Not in CA anyway. 'Hub