Am I understanding this correctly?

[coolmom04]

If we have too much equity in our home and cars and have to file ch 13...

Our DMI is only $104 by taking all the allowed deductions already plugged into the means test for my area and then adding preschool cost and monthly babysitter costs (only $237 total extra).

So, basically if we had no value assets, then we'd have to pay back $104/month for 60 months totaling $6240 no matter HOW much we actually have in unsecured debts? We have about 50K. Is that just it.. it's that plain and simple with regard to how much we pay back based only on DMI?

We owe about 215/216K on our home and current market analysis shows that it's worth either 213-237K. Our state allows only 18,500 equity exemption in a home. So, we could be over by a bit there... Let's say we had 21,000 equity minus the 18,500 we are allowed equals $2500. We would then have to pay an additional $41.66/month to keep the house.

We owe 16K on our van and it's worth anywhere from 13-18K depending on where you look! So, we could possibly have 2,000 equity in it and our state only allows $3,500 for one vehicle. So that would be okay, but we also have another vehicle that is owned outright and is worth anywhere from 2-4,500K depending on where you look! So, does that mean if we have to use the automobile exemption for my van, and can't use it for his car.. we'd have to liquidate his car??? That is not a good thing.

If we had to pay an additional amount on the vehicles, we'd do the same thing as the house.. take the amount of equity we are over, divide by 60, and also pay that in addition to the DMI?

Dang.. my head is spinning. I am mainly concerned about having to give up the car b/c we have four kids. I'm a stay-at-home-mom and DH works third shift. The only time it'd be an issue is on Monday and Wednesday when I need to get our son to preschool! Other than that, it wouldn't be a problem. But it'd be worth it in the end!

On another note... how does it work if my husband gets yearly raises and yearly bonuses? Could we use the bonus money to pay off early? I haven't read enough to find this info yet, but thought I'd go ahead and throw the question out there since I have typed a novel already!

[lrprn]

Our DMI is only $104 by taking all the allowed deductions already plugged into the means test for my area and then adding preschool cost and monthly babysitter costs (only $237 total extra).

Is the $104 figure one you calculated yourself or was it calculated by an experienced Ch 13 lawyer? Self-calculated DMIs are always suspect, especially one that is so close to being negative. Frankly, most Ch 13 trustees won't confirm a plan that shows a DMI under around $175/month because your creditors won't get as much as they would have gotten if you filed Ch 7.

So, basically if we had no value assets, then we'd have to pay back $104/month for 60 months totaling $6240 no matter HOW much we actually have in unsecured debts?

*If* a qualified Ch 13 lawyer came up with $104 disposable income on both the Means Test *and* the Schedules *and* your trustee was willing to confirm a Ch 13 plan with so little disposable income (doubtful), then yes, your payment would be $104/month.

Let's say we had 21,000 equity minus the 18,500 we are allowed equals $2500. We would then have to pay an additional $41.66/month to keep the house.

If your trustee agees to a payment plan for the extra equity (a big if), then yes, it's possible.

So, does that mean if we have to use the automobile exemption for my van, and can't use it for his car.. we'd have to liquidate his car??? That is not a good thing.

Some states allow each spouse filer to take the auto exemption (essentially doubling it for married filers), but others make both filers use the one exemption. Ask about this during your free iniitial interviews with 3-4 experienced bk lawyers in your area.

If we had to pay an additional amount on the vehicles, we'd do the same thing as the house.. take the amount of equity we are over, divide by 60, and also pay that in addition to the DMI?

Again, this depends on whether your trustee is willing to deal for such a small amount. The payment plans that trustee create are not always for the full life of your plan. The time frame could be much shorter.

The only time it'd be an issue is on Monday and Wednesday when I need to get our son to preschool! Other than that, it wouldn't be a problem.

For the next year, at least. Then what about the years after that? Your son isn't going to be in preschool forever.

On another note... how does it work if my husband gets yearly raises and yearly bonuses? Could we use the bonus money to pay off early?

During a Ch 13, especially one with as small a payback % as yours would be, your trustee could demand the bonuses to share among your creditors. This varies a great deal between trustees, so again talking with experienced bk attorneys to find out how the Ch 13 trustee in your local court handles this is the best way to go.

Unless you are in a 100% payback Ch 13, paying extra above your regular payment only increases the payback to your creditors. It does not shorten your plan by even one day.

Now I have some questions for you....depending on where you got your value estimates, you may have much less value in your home and cars than you think you do. Also assuming your DMI is close to accurate, then you are *really* close to having a negative DMI. Have you considered filing Ch 7 and then if your asset values are accurate, ask your Ch 7 lawyer to try to arrange a payment plan with your trustee. You end up with everything unsecured wiped out, are discharged much more quickly than 3-5 years, and still would make very similar payments to the trustee to cover the equity that your state exemptions can't quite cover.

Please discuss this possibility when you sit down for your free initial interviews with 3-4 experienced bk lawyers in your area.

[coolmom04]

Now I have some questions for you....depending on where you got your value estimates, you may have much less value in your home and cars than you think you do. Also assuming your DMI is close to accurate, then you are *really* close to having a negative DMI. Have you considered filing Ch 7 and then if your asset values are accurate, ask your Ch 7 lawyer to try to arrange a payment plan with your trustee. You end up with everything unsecured wiped out, are discharged much more quickly than 3-5 years, and still would make very similar payments to the trustee to cover the equity that your state exemptions can't quite cover.

Please discuss this possibility when you sit down for your free initial interviews with 3-4 experienced bk lawyers in your area.

Wow! I did run the numbers myself, but the only numbers *I* added to the test was the $100/month for childcare and the $137.50 allowed for education of children under 18 yrs). All the other stuff was already there as the standard allowances. Oh.. I also entered my husband's monthly gross income based on his last six months of paychecks divided by six. Oh.. I also added our monthly mortgage and vehicle payment.

When you say "big if" regarding if the trustee agrees to the payment on the equity in the home... is it more likely they'd make us give up the home??

I am actually trying to file ch7 and really don't know why we wouldn't be allowed to, but I am absolutely terrified something is going to happen. We've stopped paying all the credit cards (except two that were used recently). So, my husband is worried we'll end up screwing ourselves over b/c our interest rates are going to sky rocket and we won't be able to afford even the minimum payments if we aren't able to file bankruptcy.

We are only filing in his name b/c I had ch7 closed in 2002. We can't wait it out another year to file jointly. I am not sure my husband could deal with the creditors calling us for a year

So, I am trying to cover all our bases and hopefully have some sort of idea of what we are likely going to end up doing. Our appointment with the attorney isn't until 01/12, but she is talking with me over the phone and answering pretty much whatever questions she can with the information I have given her. I've been very honest and up front about everything. she does not know the particular value of our vehicles and home, but does know that our home is new, what kind of vehicles we have, my husband's pay, etc. She said, "I see absolutely no reason why you can't file ch7." But... again... she doesn't know all the exacts, so maybe that wasn't a good thing for her to say?

I just can't believe how stressed I am. If it weren't for the fear that we'll end up with credit card minimums we can't afford if we aren't eligible to file either 7 or 13, I would be fine.. I could handle the stress. GAHHH!!! I think my head is going to explode now.

Thanks for your advice and for listening!

[StartingOver08]

You may be able to file a Ch 7 with your husband if it has been 8 yrs since your FILING date. The time period runs from File date to File date. Check your timelines and of course ask the attorney. It is best to go to your attorney interview with written questions because sometimes the attorney's have a little 'presentation' type thing - and it is best to get as much answered as possible so you can decide if s/he is the attorney for you. We always suggest interviewing several attorney's so you can pick the best one for you and and your situation.

Also, I can not emphasize this enough, our stuff is not worth what we think it is! Just look at ebay and craigslist for valuations and you will be surprized at how low everything is priced. When it comes to homes, those automated valuations online are not very accurate. Get a free CMA from an experienced realtor using a quick sale value. The comps need to be 90 days or less. There is a cost to selling property too - the Trustee should take that into consideration.An experienced BK attorney will know how to handle this for you.

[coolmom04]

How do I find out when I filed? All I have is paperwork frim court saying the date it was closed. Could I find that on pacer?

[StartingOver08]

Yes, check PACER.

[coolmom04]

Ugh.. I checked pacer. My 2002 case was filed on 06/24/2002. It's only six months from now, but that'd mess so much stuff up. I think we are fine without adding me, but I did want to look into it.