Chapter 13/conversion

[ashlei422]

I am considdering filing a Chapter 13. I have consulted an attorney prior to, but am just curious what you all think, Here is my info:

1. $3,200 behind in BAC mortgage
2. $3,000 in collection accounts
3. No assets and no equity in house
4. Have steady job, but only bring home $1,100 eo week
5. My grandpa is a joint owner on my deed, note and mortgage (he has very good credit)
6. My credit ratings are 545/525/575

I know that foreclosure is lurking.. I know that the only way to "save" my house and grandpa from paying is to file Chapter 13..

I barely make enough to cover the proposed Plan payment and regular expenses. I don't have the money to pay the past due amount of my mortgage and I don't thnk I can hold off foreclosure until I have the money.

Is it possible for me to enter into the Chapter 13, pay the payments, and then convert to a 7 in January when I get my IT return, and can afford to pay the Past due? If so, what happens to the payments I paid and the $3,000 in attorney fees the chapter 13 attorney is charging me over the course of the 3 years?

I really appreciate your reading this and look forward to some ideas..

[ashlei422]

Another thing.. the main reason I don't want to file a Chapter 13 is becuase the attorney fees are nearly twice the amount of the amount of secured claims I am going to pay through the plan, thus making my payment nearly double...

HAS ANYONE FILED A CHAPTER 13 PRO SE AND BEEN SUCCESSFUL?

[lrprn]

3. No assets and no equity in house

You may have no equity, but the house is still a secured asset.

4. Have steady job, but only bring home $1,100 eo week

So it looks like you make about $52-54K a year, correct?

I know that the only way to "save" my house and grandpa from paying is to file Chapter 13..

You don't say how you know you have to file Ch 13.

If you can share a little more about your situation - the state you live in, if anyone else is living in the house besides yourself, and if you have dependent children - we can help you sort things out better.

At any rate, you really need to meet with more than one lawyer. Set up free initial consultations with 2-3 more as soon as you can. Just because this lawyer had this opinion about your situation doesn't make it right. Especially with Ch 13, there are a lot of gray areas of the law that can be interpreted several ways. Different lawyers see the same figures differently sometimes.

Is it possible for me to enter into the Chapter 13, pay the payments, and then convert to a 7 in January when I get my IT return, and can afford to pay the Past due?

If you qualify to file Ch 13 (and at this point it can't be confirmed that you do), then only if your income or expenses change significantly and for the long term can you amend your plan. Getting a tax return (which I hate to tell you, some Ch 13 trustees will take all or part of) is a short-term, one-time change. Ch 13 plans can't be amended for something like that.

If so, what happens to the payments I paid and the $3,000 in attorney fees the chapter 13 attorney is charging me over the course of the 3 years?

If you can qualify to convert your Ch 13 over to Ch 7 (and at this point we don't have enough information to know if that's even a possibility), then whatever your lawyer has been paid up to that point by your trustee is what he gets from your Ch 13. However, your lawyer can charge you for converting the case over to Ch 7 and also charge whatever he would normally charge for Ch 7 that he hasn't already received in disbursements.

[lrprn]

Another thing.. the main reason I don't want to file a Chapter 13 is becuase the attorney fees are nearly twice the amount of the amount of secured claims I am going to pay through the plan, thus making my payment nearly double...

Then perhaps a Ch 13 isn't the best way out of this situation for you.

HAS ANYONE FILED A CHAPTER 13 PRO SE AND BEEN SUCCESSFUL?

Frankly unless you have very, very deep knowledge about Ch 13s, including recent case law decisions that impact Ch 13s and the customs of your local Ch 13 trustee and bk court judge, it's crazy to file a Ch 13 by yourself.

One of our most knowledgeable, helpful members is JustBroke who filed their Ch 13 without a lawyer. However, JB has legal experience and did very extensive research into Ch 13 before filing. Even JB says it's very, very difficult to file a Ch 13 pro se (without a lawyer) and not sail yourself into a sea of major trouble because you don't understand the finer points of Ch 13 law. You need an attorney. Interview 2-3 more, then come back and tell us what you find out about the options in your challenging situation.

[justbroke]

As stated, I would get a few interviews (consults) with several lawyers. Even if you did end up in a Chapter 13, some attorneys (not all, some) will allow a larger portion of the fee to be rolled into the Plan. Your base fee (paid before filing) may be equivalent to the Chapter 7 fee, and they would roll the other fees into your Plan as administrative debt (highest priority). Of course, an attorney will look to how complex your case is, whether you're doing lien stripping on junior mortgages, cramdowns on cars, or have many creditors.

Depending on your income tax return (IT Return, I assume) is not a good plan. When you're in a Chapter 13, almost all Districts require you to surrender that Tax Return for the benefit of the unsecured creditors! (There are a few that don't require them.) In any event your arrears would be paid in the Chapter 13 plan over your applicable commitment period (36 months to 60 months depending, mostly on whether you're under or over the median income, respectively).

As mentioned, a Chapter 13 can be very complex depending on the types of debt and things you'd like to do with your Plan of Reorganization (which defines Chapter 13). This Plan is basically your "contract" with the Court and Creditors over the next 3-5 years, so needs to be done properly.

It may actually be worth it for you to do the Chapter 13, even though it's more than a Chapter 7. You'd get to pay back the past due amount over 36-60 months, while keeping the home. I don't know what you owe on your home or even if you have multiple mortgages on it. There could be some additional savings. Do you have a car as well?

I agree with lrprn, there's a lot to manage with a Chapter 13 around the Plan. Getting the Plan confirmed is the biggest challenge. I went to 4 hearings to get my Plan finally confirmed. Luckily, the Trustee liked my Plan and didn't even object. However, I had two objections from my home lender and auto lender (same attorney), and so I had additional hearings.

The thing that almost all Chapter Pro Se filers say after they spend hours and hours and hours and hours of research and reading and writing... they wish they just spent the money on an attorney. After doing it yourself, you realize that the attorney price is cheap!

Whatever you decide to do, let us know. We are here to help you in whatever way that we can.

[ashlei422]

Okay, I live in Illlinois. My house value is 66,000 and I owe nearly 67,000. I only have one mortgage.

I have a 02 Dodge stratus which I own 1/2 interest in because my grandma's name is on the title with mine.

Sorry for the confusion.. my income is 1100 eo week(EVERY OTHER WEEK) My income is just over 30,000.

I have two children, who are both fully dependent on me and my income.

The attorney decided to let the entire $3,000 fee be in the plan. The only amount I have to pay before filing is the court costs of $274.

I made the decision to leave after 3 years of emotional, physical and financial abuse. I basically supported a very stable man who earned a very good living so that he could go out and have his fun and his things. I made that decision and this is the reprecution.. almost doesn't seem worth it .

I agree with getting a few more opinions. Also, the one attorney I saw is the number one BK attorney in my state and area. He is also a Trustee on NUMEROUS BK's (I know from the BK issues involved in the collection aspect of my job) and he has informed me that since my income tax return is mostly earned income credit, they will not take it.

Perhaps I left out one small detail, in that I work for an attorney who is very well knowledged at numberous legal matters. He does not currently do bankruptcy law, but he has in the past. He and I both know that the laws have changed, substantially. He has agreed to overlook the documents I prepare and advise me if he thinks they are adequate.