Questions before filing Chapter 13

[rp9]

Bear with me, I am new to this site. I have a few questions before filing a Chapter 13

1. I need a new roof on my house and it will cost 6 to 7 thousand dollars. I can cash out a money market, use my tax return and a refund I received in escrow payments to pay for the roof, am I okay to do this immediately before I file for Ch 13? It will take all cash I have available to me. Can I file for Chapter 13 now and still use this money to pay for the roof after I file? I will need to pay up front in order to get the work done.

2. I am above the median income for my county in Michigan but my DMI is in the negative. Will I be able to have a 36 month plan? I am up to date on all of my bills except for credit cards, so I am pretty sure chapter 13 will be successful if I strip my 2nd mortgage.

3. I had a credit card through my credit union and the attorney I spoke to told me to stop paying on the card (I was paying it to keep the account in good standing). Now the credit union has paid off the card and is now automatically deducting the payments from my account and treating it as a debt owed directly to the credit union. How do I account for the debt in my chapter 13 plan?

[justbroke]

1. I need a new roof on my house and it will cost 6 to 7 thousand dollars. I can cash out a money market, use my tax return and a refund I received in escrow payments to pay for the roof, am I okay to do this immediately before I file for Ch 13?

Spending money to fix the roof over your head should not be an issue at all. I would probably do this before filing. Also, you should a local attorney to see if there are any pitfalls that I'm unaware of.

2. I am above the median income for my county in Michigan but my DMI is in the negative. Will I be able to have a 36 month plan?

Not unless you are paying 100% to the unsecured creditors. The 36 or 60 month rule is determined simply by being under or over the median income, respectively. Since you're also thinking of stripping your 2nd mortgage, that will probably mean a significant amount to unsecured creditors anyhow, so the chance of being in a 100% plan is probably low.

3. I had a credit card through my credit union and the attorney I spoke to told me to stop paying on the card (I was paying it to keep the account in good standing). Now the credit union has paid off the card and is now automatically deducting the payments from my account and treating it as a debt owed directly to the credit union. How do I account for the debt in my chapter 13 plan?

You can't account for it in the plan, since it's an unsecured debt. It appears that the Credit Union is using cross-collaterization or a right of offset. You would report this on your Statement of Intentios if they've taken over $600 in the last 90 days before filing. The Trustee will go after this money to claw it back on behalf of all unsecured creditors.