Having Trouble Making Other Payments

[chzhd]

We filed in April....there were no problems with anything at the time. Now we are having a hard time making payments other than our Ch 13 payment. We're behind on our mortgage, behind on our leased car, etc.

I am in contact with the mortgage co., where I had set up a payment plan. I'm already behind on that. I called my attorney, where they didn't really help. They said that it wouldn't affect my Ch 13, that hopefully I could just have it worked out with the mortgage co. From what I've read, missed payments could affect our Ch 13.

We have a couple of reasons that we're having trouble....first, our day care amounts per month are higher than we thought they would be. Second, literally 2 days after we filed, my mother-in-law was diagnosed with cancer, so my husband has had to make several trips out of state, since he is the only available person to help her, etc. So, it hasn't been like we're still spending like crazy.

I'm wondering if we should put our house up for sale, but I'm not sure if that's an option, since it has to be approved, etc. Plus, would we have to pay more to our plan, if our housing payments are lower?

Could I take a hardship withdrawal from my 401K, since I've taken all the loans before filing? I'm guessing I can't do that while in Ch 13??

I thought that filing Ch 13 would make everything better, but it's almost worse....

[jwmc1]

Have you discussed amending your plan? My attorney told me that most CH 13 filings rarely go the entire 60 months without some kind of modifcation.

[maddog2112]

What kind of money were you making when you filed? Were you above the median? The whole idea of bankruptcy, especially a 13 is to hold on to what you`ve got, and in your case it`s your house and car. Those are 2 things you don`t want to lose cause now that you are in bk, it would be almost impossible to replace for a long time. I went into a 13 without any planning which gave me a huge payment and 80% payback, due to working massive ot before filing(trying to keep up with cc`s). After 3 years i am in the process of converting due to large decrease in income and the inability to sustain the payback amount for 5 years. The idea of nothing going wrong and everything staying the same to be able to payout is almost impossible. My opinion is 13`s are almost all setup to fail. Selling your house and a lower payment would only give the trustee more money to pay your creditors, as your disposable income would increase on paper.The only thing you can do is try and have your lawyer modify your payment if your income has decreased, ask for a 3 month stay, (if your emergency with MIL warrants extra expenses), or try and convert to a 7. Whatever you do, try and get current on the house and car as to prevent a repo, which would snowball the problem.

[Flamingo]

You have to truly figure out if you can afford your home. When you filed, your Plan was set up at that time as to your financial picture at the time of filing. Chapter 13 plans are not based on things that may occur one year or two years after filing. That is where the filers come in and have to learn to live on a strict budget to be able to save for unexpected expenses (i.e., home/vehicle repairs, etc., etc.). If there are large increases in expenses or certain increases in income, a modification can be done to the Plan. Many people want to keep their home and go for the Chapter 13 and then realize afterwards that it is a struggle and find out they really cannot afford to keep the home. That may be the case with you or you are just having a hard time being able to cope with having a strict budget to be able to handle increased expenses. The huge lifestyle change that accomanies a Chapter 13 is the main reason for Chapter 13 failure. I know it is not easy - I remember staying awake at nights trying to figure out with my husband how we would be able to get to/from work with only $10 in the checking account, it was Monday and payday was not until that Friday.

I would review your financial situation seriously and see if stricter budgeting can get you back in order to complete your Plan and then check with your attorney as to the matter to go over that and see if a modification is in order or a conversion to Chapter 7.

Best of luck to you...