What if you want to lien strip your 2nd and keep your house, but

[tjs1970]

after the calculations of income are done and there is nothing going to unsecured creditors and all of your exemptions are figured in........and you want to keep both car payments and you have student loans that the trustee feels you just cannot afford to keep the house?

Are they going to make a personal judgement on something like that? Is there something that will not allow us to keep it?

Our first mortgage payment is $1935, two car payments equal $713, student loans are at $380, taxes are $4000 a year on the house, arrearages to the first mortgage are upwards of $15,000.

My wife makes 43k a year and I am colllecting $611 a week in Unemployment benefits before taxes.

We might be able to swing keeping the house on the first mortgage payment if we get a renter at $500 for one of our rooms which totally doable and probably lower than market based on how nice our house is and area we live in. We would have to weigh the inconvenience factor of having to deal with a roommate v.s. having to move out and rent a place and deal with a landlord.

We have not made a mortgage payment on either mortgage since March of 2009 and just now stopped paying our unsecured cards which equals about $80k between us.

I cannot file a chapter 7 due to a previous CH7 in 2003.

House value: $350k

1st principal= $359k + arrearages of about $15k
2nd principal= $87k + arrearages of about $7k

No NOD yet on either mortgage.

Back taxes owed $4200 for property
Back IRS taxes owed $3900

Also, since I am claiming unemployment, I went and got my real estate license. It is not my primary career and am just helping a relative on her house, but am still actively looking for other work.

Can I write off my licensing, realtor dues, etc..etc.. for the money I spent on Real Estate even though I am on Unemployment for my tax returns? I saved the receipts just in case I could. I have not made any money doing it as of yet anyways and not sure if I will as I am still looking actively for something else.

[TooMuchCredit]

Our first mortgage payment is $1935, two car payments equal $713, student loans are at $380, taxes are $4000 a year on the house, arrearages to the first mortgage are upwards of $15,000.
House value: $350k

1st principal= $359k + arrearages of about $15k
2nd principal= $87k + arrearages of about $7k

No NOD yet on either mortgage.

Back taxes owed $4200 for property
Back IRS taxes owed $3900

If the house payment exceeds the Census/IRS data for the median payment amount for your area by a large amount, and are paying little to none back to unsecureds, you may get an objection. As some others have said an objection isn't necessarily the end of the world as the judge will have the final say and not the trustee, but having to fight such an objection may lead to increased attorney fees.

Adding up what you have above, it doesn't look like you have enough left over to live on so you might get an objection that you cant fund the plan.

Assuming you would be in a 60 month plan,
1,935 + 713 + 380 + (4,000/12) + (15,000 / 60) + (4,200/60) + (3,900/60) = 3,746.33 per month = $44,955.96 that's more than your wife's salary of $43K BEFORE taxes.

Now I think the student loan can be defered so that would bring it down to $40,396 a year.

Assuming you'd only take home 75% of the $43K salary, that's $32,250. The $611 unemployment adds $7,332 so $39,582.

So you are in the hole $814 a year and that's without any allowance for food, clothing, utilities, insurance, etc. I don't know that $500 a month from a roomate would be enough.

[UpsideDownMI]

Your plan has to be feasible to get confirmed. Your expenses could be an issue for you.

[tjs1970]

My unemployment is $611 a week........not a month as you have it calculated above.

[HHM]

Bottom line, to do a chapter 13, you must show some positive number on schedule I&J.

Are your back taxes "priority" taxes? If yes, they MUST be paid in the plan along with any mortgage arrears on the 1st mortgage.

You won't be allowed the student loan payment.

[tjs1970]

so my mortgage arrears and the back priority taxes along with my current mortgage payments, current property taxes and car payments might be what my plan will allow........if i cannot afford that, then the court could decide i just can't afford to live there anymore?

i understand the student loans will probably get pushed to the back of the line but not be discharged.......

what i am trying to do is not pay any of my unsecured debts and keep the house while stripping the second lien........

[tjs1970]

i took the hypothetical means test on this site and it came back with a negative $326 monthly.......which i am assuming is going to allow me not to have to pay back the unsecured stuff.....?

http://www.legalconsumer.com/bankruptcy/means-test/

[tjs1970]

this is what it said after i did the test..........remember i cannot file chapter 7 because of a prior chapter 7 in 2003


Based on the information you have entered so far, your monthly income of $5,800 is above the median for for 2-person households in Washington ($5,347), but you pass the means test because, its formula says that your expenses will leave you with no disposable income over the next five years.


Summary of your data:

Your average monthly income is $5,800 and, so far, you have expense deductions totaling $ 6,149 per month. That would leave you with $ -349 at the end of each month to pay into a hypothetical, five-year Chapter 13 bankruptcy plan, which would pay your unsecured creditors $ -20,914 over the next five years, or -15 cents for each dollar of the $136,000 you owe them.

[TooMuchCredit]

My unemployment is $611 a week........not a month as you have it calculated above.

Sorry about that. I think that's more than double what one gets in Georgia!

[tjs1970]

yeah, i am getting the maximum that WA state allows of 586 a week plus the additional 25 bucks from the feds ........i think WA is in the top 5 or 10 of highest payouts for UI benefits, but i was also making over 100k a year, so that doesnt nearly help with the expenses i have

[HHM]

Unsecured creditors, in most districts, must receive "some" dividend, even if it is 0.1%. Again, you cannot show negative disposible income on schedule's I & J (schedule of income and expenses), if show a negative, the court will deny confirmation because the plan is not feasible and dismiss your case.

[tjs1970]

HHM............so you have never seen ANY cases where unsecured creditors get nothing and all of the payments go to only Secured Creditors?

Didnt that happen in this case in which you posted in one of the other sections here?

http://origin.www.supremecourtus.gov/docket/08-998.htm

[HHM]

I wouldn't go that far...again, this is more a district by district issue. But I am willing to bet that if you show an absolute ZERO going to unsecureds, the chapter 13 trustee will object. The U.S. Trustees, who over see the BK trustees, are practically mandating that the BK trustee file an objection if unsecureds get ZERO. However, you have taxes which are, presumably "priority unsecured" (unless the IRS filed a tax lient) debt, so if the plan pays that tax debt, you have an argument that the unsecured's are getting something.

One way around this initially is that you need to write into your plan that you expect regain employment within 6 months...but these types of specialized plan language is something you should really get an attorney to help you with.

But, you still need to show disposible income sufficient to pay the taxes, mortgage arrears and any other arrears in the plan.

[tjs1970]

not only do i want to not pay any unsecured creditors......i want to shorten the legnth of the term of the CH 13.........thus for the hope of having negative disposable income.........along with the lien strip of course.........


i owe about 3800 in back IRS taxes but when i file my return this year (i expect a refund, the IRS will just offset it with what is owed to them, so that may wipe that out.....) i could i guess strategically wait to file my tax returns until after i file BK

[tjs1970]

okay....so i have to somehow show the trustee that i can pay back those arrears in mortgage thus i couldnt be negative......

i am sure when i meet with my attorney he"ll have a way to calculate things to be in my best interest.......