chp13...pmts can't handle...need advise...please!!

[LawRookie]

I filed for chp 13 back in June made 4 pmts (july-Oct) to trustee @$1500 each...

My wife is collecting unemp but that is going to end soon (2 more months).. its about $900/month

when I filed chp13 pmts were going to be for 10 months since I had only about $10K unsecured....I had a lot in North Carolina as investment that I could not pay for anymore after 2.5 yrs...partner walked away...been trying to sell for over 2 yrs...nothing

Unsecured debt
0% CC - $5000
CC - $1000 - pay for gas, groceries..etc (wife's)
CC - $1000 - pay for gas, groceries..etc (mine)
0% CC - $1500 - furniture

we were current on all the CC, our home mortgage..no car pmts...etc..

only thing we were behind was investment lot in North Carolina...
we were also HUGE in loss in value bought @$185K down to worhtless...waterfront lot too...

So I don't have confirmed date yet..months away....and got letter in mail bank has filed motion or something like that for defiency so that investment lot which the bank is saying is about $165K unsecured debt now.

Problem is that $1500 we were going to pay for about 10 months was coming from our life savings. our security nest egg in case I lost job and need to pay for roof over our heads...which is about gone...no way it has 5 yrs worth @$1500.00

They included my wife unemp when they calculated the disposable income...which in 2 months is gone....

Also wife's may or is planning to go to trade school to learn so she can get job...maybe nurse something like that...but that is about 1 year away...then we pay for school pmts.

plus we drive 2 old cars (10 yrs old and other 6 yrs old)...can't drive them for 5 more yrs until chp 13 is done...

1. How can I have them change chp13 pmts for something I CAN really afford with my income..which we are about to loss the $900/month unemp check for wife

2. What can I do about our cars? I mean they are older and need to replace probably at least one in 1-2 yrs from now so the is another expense we be carrying...but chp13 pmt is sucking all our funds...thye calc chp13 pmts so high they give u no room for unforseen expenses....A/C breaks in FL is HOT, car breaks down, child gets injured in soccer game..etc...

3. Is North Carolina a Anti-deficiency state? http://www.poynerspruill.com/publica...cyStatute.aspx

this is an out of state investment we did....my primary residents is in FL but investment is in North Carolina....what a mistake I have cause my family....

thanks for the HELP forum is GREAT...

[rrockinggramma]

is a chapter 7 conversion possible with your wife's loss of income?

[justbroke]

First, you never mentioned if you filed with an Attorney. If you did, you definitely need to talk with your attorney to review your income, expenses and your plan again. If you're actually dipping into retirement funds (401(k)) to pay your plan, then there is something seriously wrong with how your Plan has been prepared.

1. How can I have them change chp13 pmts for something I CAN really afford with my income..which we are about to loss the $900/month unemp check for wife

These can only be changed if they don't create what's called an infeasible plan. That is, you may be required to pay a certain amount to the unsecured creditors over the life of the Plan (known as the applicable commitment period ACP). If you are unable to fund the plan appropriately, you have no choice but to dismiss. Also, if you're unable to fund the plan, you may need to consider conversion to Chapter 7.

2. What can I do about our cars? I mean they are older and need to replace probably at least one in 1-2 yrs from now so the is another expense we be carrying...but chp13 pmt is sucking all our funds...thye calc chp13 pmts so high they give u no room for unforseen expenses....A/C breaks in FL is HOT, car breaks down, child gets injured in soccer game..etc...

To me, it reads as though your Plan was not properly worked. If yourcars are that old, your attorney would have (could have) recommended getting new cars before filing. Attempting to get through a 3 or 5 year Chapter 13 (with no new credit allowed) can be very difficult. That's why folks who have cars that are already 5+ years old, are advised (usually) to get a new car before filing!

3. Is North Carolina a Anti-deficiency state? http://www.poynerspruill.com/publica...cyStatute.aspx

North Carolina is a deficiency State and they also use Power of Sale... aka the non-judicial foreclosure.

this is an out of state investment we did....my primary residents is in FL but investment is in North Carolina....what a mistake I have cause my family....

You have EXACTLY the same issue I have. My investment property is in North Carolina and I live in Florida.

I'm going to get a little frank and serious on you, but I'm not trying to get you worked up, confused and angry. You have serious issues with your Plan, cars, property and finances. This needs to be dealt with immediately, or you'll find yourself with no retirement savings, a dismissed Chapter 13, and creditors suing you left and right.

You really need to get back with your attorney. You need to be talking to him now, instead of posting here to me (us). I want you to succeed and you can. Since your plan isn't confirmed, you can actually change it now! There's no reason to pay $1,500 a month that you don't have for 10 months. That can be spread out. Also, I don't even know what your calculated disposable monthly income (DMI) is, or if there are other factors putting you into a 100% payback (based on the $10K of debt, not the additional $165K of unsecured debt added by the deficiency).

[LawRookie]

justbroke - thanks for the reply....I heard you were VERY knowledgable on this topic..

Let me clear a few things up...

First, you never mentioned if you filed with an Attorney. If you did, you definitely need to talk with your attorney to review your income, expenses and your plan again. If you're actually dipping into retirement funds (401(k)) to pay your plan, then there is something seriously wrong with how your Plan has been prepared.

Yes I files with an attorney...he "supposly" files the most bankruptcy cases in FL..
I'm not dipping into the 401k or IRA....just into the savings accnt that I have set a side for emergencies...ie...AC breaks...get laid off need funds to cover living expenses for 2-3 months...etc....

These can only be changed if they don't create what's called an infeasible plan. That is, you may be required to pay a certain amount to the unsecured creditors over the life of the Plan (known as the applicable commitment period ACP). If you are unable to fund the plan appropriately, you have no choice but to dismiss. Also, if you're unable to fund the plan, you may need to consider conversion to Chapter 7.

I don't think I can file for chp7...I ws told at begining chp13 would be best...plus chp7 I would loss all funds in checking accnt, saving accnt..but not retirement accnts..

To me, it reads as though your Plan was not properly worked. If yourcars are that old, your attorney would have (could have) recommended getting new cars before filing. Attempting to get through a 3 or 5 year Chapter 13 (with no new credit allowed) can be very difficult. That's why folks who have cars that are already 5+ years old, are advised (usually) to get a new car before filing!

Attorneys tought it would be done and over with within 10 months...paying back 100% of unsecured...he made the payments big because that was my "disposable" income...which to me is b.s. cause the "allowables" don't take into affect "real" expenses....it just your basic living expenses...not school tuition for daughter cause we don't want her going to public school is rated D., give u so little for food, gas...etc..can't live that way...

with the added unsecured of the defiency I can't be in 100% anymore...I thought percentage doesn't mean anything...they calculate DMI....then figure out if you pay 3 yrs or 5 yrs then that is what creditors get..

I don't think you can pick 3 yrs and be less then 100% cause then they would say you have to pay until 5 yrs..is that correct?

I mean can I say DMI is $500..I want to pay for 3 yrs...total would be $18K but unsecured is $175K...I think they would tell me pay until 5 yrs so total would be $30K....


plus like to know how the bank is calculating investment is only worth 20K ...I mean in the real estate market now nothing is worth anything but can't use that as evaluation...according to statue below...

North Carolina is a deficiency State and they also use Power of Sale... aka the non-judicial foreclosure.

what does the mean? I found this ...

http://www.ncga.state.nc.us/EnactedLegislation/Statutes/pdf/ByArticle/Chapter_45/Article_2B.pdf

read article 45-21.36...

You really need to get back with your attorney. You need to be talking to him now, instead of posting here to me (us). I want you to succeed and you can. Since your plan isn't confirmed, you can actually change it now! There's no reason to pay $1,500 a month that you don't have for 10 months. That can be spread out. Also, I don't even know what your calculated disposable monthly income (DMI) is, or if there are other factors putting you into a 100% payback (based on the $10K of debt, not the additional $165K of unsecured debt added by the deficiency).

I been trying to meet with attorney but Legal assistance says meet with him after unemployment actually stops which is on 1/2/2010 but i get confirmed on 1/20/2010....she also told me that to change plan payments we need to give 20 day notice before confirmation.

My DMI according to the attorney's worksheet I'm suppose to have $1500/month....but doesn't account for daughters pre paid college which I can't stop not I don't think which is $500/month....then her current monthly tuition is about another $500...

I do make good salary and can't complain....but we are lossing unemp for wife which is $900/month...plus cars can't last until chp13 is done for 5 yrs..

I would like to see the chp13 pmt go down by $900/month which how much our combine income is losing per month....

I pay my primary residents not in the plan...is seperate...

Originally was 10 months...bank won't come for defiency...but now bank is saying loan is %90 unsecured and wants that in defciency amount..


p.s. I can't belive ur paying over 5K/month into the plan

[justbroke]

Attorneys tought it would be done and over with within 10 months...paying back 100% of unsecured...he made the payments big because that was my "disposable" income...

This is where your attorney possibly went wrong. I say this because for the attorney not to have considered the deficiency claim from the "investment' property... is just an error or lack of ineptness.

which to me is b.s. cause the "allowables" don't take into affect "real" expenses....it just your basic living expenses...not school tuition for daughter cause we don't want her going to public school is rated D., give u so little for food, gas...etc..can't live that way...

Well, seems you're choosing to spend a lot on private school tuition and, generally, the Bankruptcy Court is not so lenient on this. What did your attorney tell you abuot the tuition? It's very telling to me that he didn't include it on your Means Test (Form B22C).

with the added unsecured of the defiency I can't be in 100% anymore...I thought percentage doesn't mean anything...they calculate DMI....then figure out if you pay 3 yrs or 5 yrs then that is what creditors get..

I don't think you can pick 3 yrs and be less then 100% cause then they would say you have to pay until 5 yrs..is that correct?

Yes, Percentage doesn't mean anything UNLESS you are required to be in a 100% plan. In any event, I think you're about to have plan confirmation issues because it reads like your attorney was trying to get you confirmed in a 10-month Plan because you were actually paying back 100%. Since you also state that you earn a decent income, that suggests to me that you're also over-the-median and your applicable commitment period (ACP) is going to be 5 years. Compound that with the $165K deficiency which is now lumped with the other $10K in unsecured debt... you now have $175K of unsecured claims.

what does the mean? I found this ...
http://www.ncga.state.nc.us/EnactedL...Article_2B.pdf

I am VERY familiar with North Carolina General Statute (N.C.G.S.) under 45-21 and specifically under 45-21.36. That paragraph goes specifically to your (as mortgagor) ability to challenge the amount for which the property was sold. In other words, if the land was actually worth $140K, and they sold it for $20K, you can challenge the valuation.

I been trying to meet with attorney but Legal assistance says meet with him after unemployment actually stops which is on 1/2/2010 but i get confirmed on 1/20/2010....she also told me that to change plan payments we need to give 20 day notice before confirmation.

You need to be more forceful, but not on the unemployment issue. If you actually have a claim filed by the lender for the investment property in N.C., and it has increased your unsecured claim pool by $165K, you and your lawyer need to sit down yesterday and re-write the plan.

My DMI according to the attorney's worksheet I'm suppose to have $1500/month....but doesn't account for daughters pre paid college which I can't stop not I don't think which is $500/month....then her current monthly tuition is about another $500...

See above. I don't know any court that is going to let you pre-pay college tuition or even have private grade school at $500/month!

I would like to see the chp13 pmt go down by $900/month which how much our combine income is losing per month....

Wouldn't we all!!!

p.s. I can't belive ur paying over 5K/month into the plan

I can't either! I also pay taxes and insurance outside the plan.

[LawRookie]

I am VERY familiar with North Carolina General Statute (N.C.G.S.) under 45-21 and specifically under 45-21.36. That paragraph goes specifically to your (as mortgagor) ability to challenge the amount for which the property was sold. In other words, if the land was actually worth $140K, and they sold it for $20K, you can challenge the valuation.

I have an issue that the bank states or is estimating is only worth $20K and the rest is unsecured ($165K)...I mean for real $20K...just because someone is willing to pay that little doesn't mean the true value of it....

You need to be more forceful, but not on the unemployment issue. If you actually have a claim filed by the lender for the investment property in N.C., and it has increased your unsecured claim pool by $165K, you and your lawyer need to sit down yesterday and re-write the plan.

I have called them and they told me not until the unemployment has stopped....nothing has changed since you filed so we (law firm) can not do anything...

How can I rewrite the plan cause my DMI is $1500 and they made my chp13 pmt that much. I mean I can't believe if my DMI is $1500 then how can the courts take 100% of that..leave nothing for what "if" cases...they didn't include the tuition (college or school) into the DMI...

For example say someone has $200K (unsecured)
$3000 (after taxes and 401K contributions)....
-$1000....allowable expenses are say
---------
$2000 DMI does all that need to go to the Chp13 pmt...

is that how it works?? or they take a percentage of DMI if so what percentage?

Wouldn't we all!!!

So you don't think I have a chance that the trustee is going to lower the pmts? Cause we are losing $900/month in income?

I have nothing else that income can come from ...unless I stop contribution into the 401K at work and lose the match and tax benefits...
what is the allowable contribution amount in chp13?

The whole point of me filing chp13 was to pay all unsecured (10K) at 100% and then surrender the secured but the bank is low balling the value of the lot to almost nothing....and has claimed it as unsecured. But since they have not sold it they can't determine the deficiency....but my concern is what if they sell it for $1(one dollar)...at what point is unjustly or grossly too low...

I mean I understand it has lost value but selling it for $1 doesn't mean is only worth $1...

[justbroke]

I have called them and they told me not until the unemployment has stopped....nothing has changed since you filed so we (law firm) can not do anything...

To me, this indicates that the attorney believes that your disposable monthly income (DMI) amount is calculated correctly and the only issue is that your wife will lose her unemployment insurance income soon.

How can I rewrite the plan cause my DMI is $1500 and they made my chp13 pmt that much. I mean I can't believe if my DMI is $1500 then how can the courts take 100% of that..leave nothing for what "if" cases...they didn't include the tuition (college or school) into the DMI...

Yes, your actual DMI needs to be committed to the Plan. Some attorneys will work with the Trustee to allow less than your DMI over a longer period, but only if you're paying 100% back.

First, your problem is the DMI. If you believe that there are expenses that are missing from your Form B22C, then you need to work with your attorney. Have you gone through the form yourself (form B22C) to see what values were used? Do you agree with them? Do you know that you can include "some" private school amounts (although I think $500/month may be considered luxury, but I don't know your area and Trustee).

is that how it works?? or they take a percentage of DMI if so what percentage?

Unfortunately, your DMI is your DMI. It's your lawyer's jjob to make that DMI as low as possible. You do need "some" wiggle room in the plan for rainy days, but you are not entitled to rainy days funds at all. That's just the way the law is written... all projected disposable income.

So you don't think I have a chance that the trustee is going to lower the pmts? Cause we are losing $900/month in income?

Until your wife actually doesn't have the $900 coming in, all you can do is wait on that specific issue. Generally speaking, an attorney will, after some job loss/loss of income, will ask the Trustee to suspend payments for 90-days while you try to look for work. If you can't find work and the situation looks more long-term, then you can convert your case or ask for a permanent decrease in your payments.

The whole point of me filing chp13 was to pay all unsecured (10K) at 100% and then surrender the secured but the bank is low balling the value of the lot to almost nothing....and has claimed it as unsecured. But since they have not sold it they can't determine the deficiency....but my concern is what if they sell it for $1(one dollar)...at what point is unjustly or grossly too low...

That's why N.C.G.S. 45-21 is there. You can challenge this. You should be all over your attorney to ask him about how to deal with the deficiency amount. Unfortunately you may either need to hire another attorney to deal with the N.C. stuff -- since you are in Florida -- or go at it yourself... as far as challenging the valuation of the property in N.C.