Dismissed 13 - now what?

[VAREDUX]

I am in limbo right now - filed Chapter 13 Feb 2009 to temporarily stay the foreclosure, expecting to re-file as Chapt 7 when we were ready to let go of the house. IndyMac refused to modify or let us stay until the end of the school year. But the Chapt 13 kept my children's lives stable - we moved in the Summer. And the bank was granted relief from the stay, as I expected, and resumed foreclosure, also as I expected. Foreclosure finally went through in September.

I expected that my primary, secondary, and equity loan mortgage holders would immediately try to collect the difference between the foreclosure sale price and their loan balances - an amount I estimated to be in excess of $100K, which would make Chapt 7 bankruptcy a rational choice. So I requested a voluntary dismissal of my Chapter 13 bankruptcy to stop the garnishment of my wages.

But now, nothing has happened other than my old Discover card account - which i'd included in the Chapt 13 filing, has contacted me and asked if I wanted to work out a settlement arrangement with them. I said let me get back to you - if I'm going to file Chapter 7 anyway, it wouldn't make any sense to settle with Discover.

I am barely scraping by right now, there's no money available to pay towards debts. To my surprise, I found out that my home equity loan has been "charged off." My lawyer told me that they have 5 yrs to change their minds and re-instate the debt if they have reason to believe my financial circumstances have changed and I could repay them now - not likely! What about my second mortgage? And the deficiency on my first mortgage? I have no idea where I stand with them - but I need to know so I can move forward with either filing Chapt 7, OR working out settlements with my unsecured creditors on a case-by-case basis.

My atty said don't contact the mortgage co's, wait for THEM to contact ME - but I can't wait that long. IF the primary and secondary mortgage banks come after me for the loan balances, Chapt 7 makes sense. But if they both charge it off, it might make more sense for me to salvage what's left of my financial reputation with the unsecured creditors (less than $25K, I think). My atty isn't being very helpful right now. Any suggestions? Comments? How can I find out where I stand with the banks?

[lrprn]

Varedux, I moved your post from the other thread here to one of its own. You'll get better focus on your unique issues without hijacking the other poster's thread.

I assume that you talked over voluntarily dismissing your Ch 13 with your attorney before proceeding. Did your lawyer agree with your reasoning?

Now that you've dismissed your case, your lawyer really has no reason to continue advising you. He has active clients who take precedence over your needs.

Have you considered setting up free initial consultations with other experienced bk lawyers in your area to discuss your problems now that you voluntarily dismissed your 13 and see if a quick Ch 7 filing a realistic goal or not?

[VAREDUX]

Thanks for moving my post - wouldn't want to be guilty of hijacking a thread. :-)

My lawyer seemed to agree with my reasoning, although he didn't explain my options very well. I told him I wanted the Ch 13 garnishments to stop now that the foreclosure was done, and he had me sign a form officially requesting that, but I'd never even HEARD the term "dismissal" until after the fact, when I called him to ask about what to expect from my creditors.

Unless there's some cost benefit to filing Ch 7 through his office, since they already have so much of my information on file, I'll set up some consultations with other attys.

THANK YOU!