My atty says I cannot keep vacation home?

[bvolvo]

Getting closer, and now the attorney says that there is no way for us to keep our vacation home because it would appear in bad faith to keep the vacation home and cram it down when so many other unsecured creditors would get nothing. I understand this concept, though I wonder what the lender is going to say? Or should I get a second opinion? After all this work, he changes his mond and says if he goes through with it this way, that the trustee will throw it out as being completed in bad faith, and that is never a good way to start a proceeding. I just guess that I thought secured assets were the first to get priority as far as consideration for payback? Detail are: vacation home and primary home both underwater and initially he said the
2nd mtgs on both could get crammed down and the unsecured would just have to get whatever, if anything, was left over. We have about $50k in unsecured. Please do not holler at me since I am just trying to understand all of this. Obviously I am going to play by the rules but I also want an atty that is going to fight for me. Thgouhts/suggestions?

[forgotten]

If you are going to try and cram down your vacation home it needs to be paid off durring the chapter 13 period. So if the property is worth $100k then you need to pay off the entire balance durring your CH13, if that leaves close to nothing for the unsecured creditors then that would definatly throw a bad faith flag. At the end of your bankruptcy you would own a vacation home free and clear and your unsecured creditors got jack (or close to it).

Unless you can pay back 100% of your unsecured debt durring your plan you can't generally keep a second home unless it is an investment property that pays for itself, ex: You have a $1200/mo mortgage payment and make $1250/mo from the property in income.

[justbroke]

I agree with everything forgotten has written. It's all about "bad faith". I was going to keep my investment property until just before confirmation I figured I could keep my main home. Lucky I did, because at the final confirmation hearing, Trustee tried to put me in 100% ($338K) plan because she thought I was keeping the investment property!

[forgotten]

I just noticed you said "cram down the 2nd mortgages on both", if you means strip a second mortgage that is fully unsecured, meaning the value of the home is worth less than what you owe on the first mortgage then you can ignore the part about paying the entire amount of the loan back durring the CH13. I was thinking if you were trying to cram down the value of the first mortgage on an investment property.

The second part still applies. You can't keep secured luxury items, like a second home, at the expense of the unsecured creditors.

[bvolvo]

You are correct, Forgotten. My 2nd mtgs were unsecured. All my credit cards have been charged off, but I know that at some point they are going to come back to haunt me. I hear a lot about the "100%" plan - does this mean that you are having to pay 100% of your DMI or is it reerring to something else?

[forgotten]

You are correct, Forgotten. My 2nd mtgs were unsecured. All my credit cards have been charged off, but I know that at some point they are going to come back to haunt me. I hear a lot about the "100%" plan - does this mean that you are having to pay 100% of your DMI or is it reerring to something else?

You always pay 100% of your DMI.
When you see references to a 100% plan, it means you are paying back 100% of your unsecured debt, plus your attorney and trustee fees. In your case, that would include the second mortgages you are stripping.

If you are in a 100% plan you can keep anything you want (that you can afford). If you are not you will not be able to continue to make secured payments on items that are considered luxury items. In my case, even my car payments were objected to at being too high at $530 and $460.