File or settle?

[tcsd]

First post after lots of lurking. Great site and tons of good info. In all my browsing, I've yet to find a similar enough situation to my own to answer my questions.
We had to forclose on a rental house and the bank is coming after us for the equity line (we bought with an 80/20, zero down). It's about $40k. I did the means test, and it looks like we have too much DMI to the point where we would end up paying almost twice the amount owed over 5 years. If we filed chap 13, would we only pay that DMI amount until the balance was paid in full even if it only took about 2 years?
The other option is offering to settle, but we don't have even half of $40k sitting around so we'd have to make payments. Does anyone have any insight on how long a creditor would let you make payments?
The other potential "pro" on the chap 13 list is that we may be able to do a lein strip and get rid of another $40k equity line on our primary residence. We couldn't cram down our cars (one's too new and one's paid for) and we have no other unsecured debt, no credit cards, etc.. so I don't know if it's "worth" filing for one creditor or not.
Thanks in advance!

[UpsideDownMI]

Has the foreclosed property been sold by the bank yet? They can only come after you for the deficiency balance. If the 40k is the actual balance and not the deficiency balance, I would dispute the debt while you explore your options.

[tcsd]

Good point. I'll find out. Thanks.

Still curious if it's worth filing regardless of the amount, and if our DMI is so much that it would only take 2 to 3 years to pay 100% back. How does one "qualify" for a 3 yr vs. a 5yr plan? Or, would our plan length simply be the equation of total amount owed divided by monthly DMI?

[UpsideDownMI]

Only you can make the decision on whether or not it is worth it to file. That being said, if that is your only debt you may be able to work out a settlement with a payment plan.