Thinking of Chap 13..couple of Questions

[Flying2BK]

Hello to all! I have enjoyed this fourm as a lurker for several weeks now, and I would like to put out a few questions and concerns about Chap. 13

I am a Pilot and was laid off from my job at a Major airline, I found other employment at another airline but at a much reduced salary.

I have had to relocate to another state for my job but commute back to Florida on the weekends to be close to a elderly and sick parent. I own a home that I have a mortgage on that I cannot sell (I have tried to sell and lease-no luck) I just found a rental near my new job for $1500.00 a month. I want to surrender my current house in Florida (where I will file) and plan on keeping my address in Forida as I commute home to FLA on the weekends.

I have one vehicle that I pay $398 a month on.
I want to surrender my house which I owe 260K on with a 160K 2nd.
I have about 25K in CC debt UNSECURED
I own a Boat that I want to keep (worth around 20-25K)


My question is.....

1) Will the Judge think $1500.00 a month rent excessive? I may be able to get a roomate or two. (The rental is in TN)

2) I will surrender my house. I am paying currenty $1500 on the 1st and $450 on the 2nd.

3) I have a 2003 Truck that I owe $15K on, it runs $398 a month (I will keep as my only vehicle) Or I can surrender it and get something else, either way I will need a car.

4) I have a Boat that I want to keep-It's a gas hog and I don't think the market is that good on it, I value it around 20-25K. I OWN THE BOAT 100% free and clear--I want to keep it as it live aboard-and I am not sure the airline job is that secure, so I want a place I can live in case the $hit hits the fan again in my employment, it will cost me $400 a month to berth it and storage in Florida. Do you think this will be allowable? It does have a bed, a kitchen, sink, head, etc.....ie live aboard capable.

5) I have around 25K in CC debt. This was incurred when I was laid off after 9/11 (I have been laid off several times as a pilot since then) and it seems I will never get out of debt, I could wait and file later-but I would just be further in debt. This is why most of my problems have occured. Severl layoff's and being underemployed has really killed me, I have PRERFECT Credit but I recently noticed a CC that is now charging me 24.99% interest!

6) My pay is around $4000 a month after all taxes are taken out. I estimate that my living exspenses are as follows:

1) $1500 a month rent
2) $200 utilites and misc house costs
3) $398 Truck Payment
4) $450 Boat storage & Marina fees
5) $500 Food
6) $130 Cell phone
7) $75 Internet and phone
8) $40 Gym membership
9) $100 Misc unforseen fee's and costs
10) Vehicle upkeep.

Does the above seem doable? I can't believe I am facing this, but I want to get out of debt and it seems like I am not alone! Thank you in advance for answering my questions and concerns, I look forward to your reply!


I have talked with an Attorney (but that was before I knew about this excellent website and Forum) so I didn't know the correct questions to ask.

[Flamingo]

It sounds to me by what you posted that you are not insolvent (broke). Your boat (which would be considered a luxury item in your filing) is worth the same as your unsecured credit card debt. Your other bills are covered by your salary and if you eliminate the boat expenses, leaves quite a bit more to live on. A Chapter 13 cannot be based on what you think will happen with your job or what may occur this time next year or the following year.

I suggest you fully educate yourself as to Chapter 13 (the "stickys" in this forum under the Chapter 13 section will help you). There are also some Florida folks on here who can help you out as to info on your house as Florida is a homestead state. I suggest you visit with a few attorneys to get a complete view of your financial situation because from what you are posting, it just sounds like you have just cash flow issues.

[Flying2BK]

Thanks for the reply....

I can not afford a Mortgage in Florida so I need to dump my house. I am not going to get further into debt over the next few years-its going to be now or later on BK.

I appreciate all replies~

[StartingOver08]

Given your situation, you may want to short sale your house in FL.
The boat is probably toast in a BK...

[rrockinggramma]

well probably not toast. He will have to have it appraised. I am sure it isn't worth what it was. To keep it he will have to pay in his chapter 13 to all of his other creditors what the boat is worth at a minimum. Now the only issue could be that the trustee might see the boat as a "house" since it is a house boat and kick about the 400 a month fee but if you propose a pretty decent plan and put the value of the boat in there as part of your payback, you might be ok.

[Flying2BK]

Given your situation, you may want to short sale your house in FL.
The boat is probably toast in a BK...

Ok--my question is a short sale on my house. Isn't that hard to do with a 1st and 2nd Mortgage? Getting both to agree?

I once again -send a THANK YOU to all of you the respond to my questions!

[Flying2BK]

well probably not toast. He will have to have it appraised. I am sure it isn't worth what it was. To keep it he will have to pay in his chapter 13 to all of his other creditors what the boat is worth at a minimum. Now the only issue could be that the trustee might see the boat as a "house" since it is a house boat and kick about the 400 a month fee but if you propose a pretty decent plan and put the value of the boat in there as part of your payback, you might be ok.

That would be my plan.....

thank you for the insight, plesae keep it coming!

[rrockinggramma]

yes short sales with more than 1 mortgage can be tricky. But generally the 1st position mortgage holder gets it all and the 2nd gets nothing. Just make sure the bank agrees with you doing a short sale (get it approved ahead of time) it will speed up everything

[Flying2BK]

yes short sales with more than 1 mortgage can be tricky. But generally the 1st position mortgage holder gets it all and the 2nd gets nothing. Just make sure the bank agrees with you doing a short sale (get it approved ahead of time) it will speed up everything

I owe only $260K on the first with $160K on the second.

I can easily sell for 300-325K I already had offers to such, would the second mortage really be happy with 65K toward the 160K ?

What do they do...forgive the rest? Or will I get sued for the shortages?

[lrprn]

Ok--my question is a short sale on my house. Isn't that hard to do with a 1st and 2nd Mortgage? Getting both to agree?

It's going to be difficult to get both of your lenders to agree to a short sale. Depending on how short you intend to go, your first lender might get all their money back, but your second certainly won't. However, you don't know what's going to happen unless you try.

[Flying2BK]

thanks for all the replies!


Looks like I will not go BK. I just rented out my home for $1900 a month, plenty of time to pay of debt and avoid BK.


As long as I stay employed, GOOD LUCK TO US ALL!

Big SIGH of relief!

[Flying2BK]

thanks for all the replies!


Looks like I will not go BK. I just rented out my home for $1900 a month, plenty of time to pay of debt and avoid BK.


As long as I stay employed, GOOD LUCK TO US ALL!

Big SIGH of relief!

UPDATE!

Renters ruined the house! Drained my pool and didn't take care of it---destroyed one bedroom, didn't cut the grass or keep up the landscaping---looks like a jungle!

I had to move again, to Texas--I am living on my boat--my Credit Cards have grown to 30K in Debt--all for the nice 30% APR they have kicked me with--a guy with 750 Credit, never missed a payment! Bastards!

SO--RENTING IS NOT THE ANSWER!!!! It will cost you in the end--I wish I filed last year! So here I am again a year later and not in ANY better position!

CH13 BK this month!!!!!!!!!!!!!!!!!!!

[enginegirl]

I am so sorry to hear that............ aviation is rough(but oh so sexy!)..... I am in the the business and know your pain.... wish I had filed 2 years ago when the crap hit the fan and not waited..... I had an 790 before this all happened, there are a lot of us in the same situation, too proud to have filed sooner.... and now here we are.... I finally have what I hope to be my final confirmation hearing this week and am hoping that it will not be continued again...this will be over soon...... onwards and upwards.....

[boochase]

I have been in your position years ago (well paying job with opportunity for more income and tons of secured and unsecured debt). I decided to go Ch7. It was the best thing I ever did. Went from poor to rich overnight. I thing that I learned years ago is that material things are just that: things. You can always buy another boat, house, etc. We did, and it was no big deal. See if you qualify for ch7..like many here state: go for at lwast three free consultations before deciding. $4K a month is not a lot, but if you can do a ch7, and your income starts to grow, you will benefit greatly, believe me.

[Flying2BK]

I think my income at $71,500 prevents me from a Chap7

Am I wrong?