CH13 and in hole every month by $871

[2muchinDebt]

We just got a perm. modification on our house. We planned on filing Ch 13 early January. After updating the all the schedules (we originally filled them out a year ago, but we waiting on the modification) some things have changed. Income is lower (DH was let go of his PT weekend pizza job) and have gone through all savings.

Can we be in the hole by $871/mo. and still do a CH 13?

[AngelinaCat]

Realistically, no. You are not going to be able do a Ch13. Your case is very similar to ours. I had a good paying FT and PT job, and 'Hub, semi-retired, had his consulting business. Then I lost the FT job and 'Hub lost the consulting business--his major client being the agency I worked for--and that forced us into a Ch7.

While we were still employed, we took our pre-filing counseling, and the counselor looked at our income and outgo, and likewise advised that even though we were employed, that we were going backwards and were better suited for the Ch7. Losing our jobs clinched it.

Looking back, we are very grateful that we did go the Ch7 route. We were an Asset case, and thanks to an incompetent attorney, had issues that we should not have had if she had done her job properly in educating us. We didn't find this forum until well after we had filed.

So, if I were you, I would think long and hard about it. Good luck to you!

[HHM]

Since you received your mortgage modification, do you even still need a chapter 13, if income has dropped and you really are that much in the hole, file a chapter 7.

[2muchinDebt]

I've thought about a Ch 7 and would prefer to do one. DH has a good job. I don't work (but am actively looking). We want to keep our home. Our loan was just modified into a MHA or HAMP "Obama Plan" loan. We have a HELOC of $46k we were going to strip. We owe $442k on the first..current 2009 tax assessment is $408k...up from $340k..ish 6-9 months ago. (House next door to mine was a regular sale of $480k.

So if we file a CH 7 we were told we could not strip that HELOC. All credit cards have been charged off including the HELOC. I know we still owe it, but we have NO $$ to settle anything.

DH knows he will get a raise in March so that will help. I hope to find a PT job soon (hoping and doing are 2 different things though). And we could tweak a little bit more, but both cars are older are Dodges. One has 92k and the other has 110k miles. They are not Toyotas or Nissans...I totally regret getting rid of those and getting the Dodges to save $$..it costed us in the long run.

So if we do a Ch 7 we'd have to pay the HELOC if we do a CH 13 we hae to make a payment. But with the 13...should DH lose his job we could always convert to a CH 7.