Qualify for a 7 but could use a 13? Please read :)

[browneyes]

We qualify for a 7 based on our income, and we pass the means test with a negative number (from what I can figure on nolo).

We basically have 45k in credit card debt but got behind on our mortgage before we stopped paying the cc.

We have a temporary modification forbearance from our mtg company (Wells Fargo).

We could go in and file a 7, but if WF in the future denies us a permanent mod, we would be screwed so to speak and risk losing our home.

Is it possible to file a 13 and the trustee would say that our only payment in the plan would be for the past due payments on the mortgage? Where/how does the 25% threshold of unsecured debt come into play? Also, if we are under median, we would only be a 3-year plan, too, right?

Thanks for any help!

PS: My attorney is on vacation this week, just trying to crunch my numbers and ask here because I know I will get the answer I need.

[tigergem]

I don't know the answers to all of the questions you are asking, but it is my understanding that only below median debtors can finish a Chapter 13 in three years, but you can request a 5 year plan. (I did. That was the only way I could fully fund my Plan.) I think they require that people above the median do it in 5 years so that they pay more toward their creditors.

Oh. I also qualify for a 7, but a 722 redemption loan would cost me more per month than the 13 Plan payment. So I want to try this first, and will only convert if it becomes absolutely necessary. So long as I get this stuff resolved. I am tired of living with it. (debt)

[browneyes]

Thanks Tiger.

Any other input would be greatly appreciated!!

[HHM]

Any BK will kill the modification, and frankly, the chances of you getting a permanent modification are slim anyway.

But yes, you can file a 7 now, discharge the debt (that might make it easier for you to get a modification since you will not longer have the unsecured debt obligation), but if push comes to shove and WF does not modify, you CAN file a subsequent chapter 13 to pay back the mortgage arrears and get yourself current.

On a more practical side, should you really be trying to save the house. Was it really the credit cards that got you behind on the mortgage. Is your present mortgage payment at or lower than 31% of your gross monthly income?

[browneyes]

Yes, it was credit cards. I made the stupid mistake of juggling payments to a debt mgmt program along with my mortgage payments...that's how this mess started, and I have been pushing for a mod for months now. They granted me another 6-month trial (payments were half) and I didn't realize that accepting that would screw things up and make the mod even further out of reach. The whole thing has snowballed and I am ready to move on. I have stopped paying the CC and housing pmt is about 30% of total income. I went to the OOP and finally got a forbearance modification with a higher payment (extra $300) so I am hoping in good faith that will be my new payment with taxes.