Ok, so my wife and I are just about to file. It has been a long few months, but this forum has been great!
We met with our attorney last week and he had an interesting suggestion and I wanted to get some feedback/thoughts about it...
Our initial proposed payment was for $2,200. We were/are very happy with that plan. It kept our home, rental, and one vehicle outside of the plan, while putting our other vehicle in the plan (to bring interest rate down to Till).
Our attorney is now suggesting that we add our rental into the plan (with the one vehicle), and increase our payment to the trustee to $3,100. However, that change modifies the loan on the rental and pays it off (~$120k) over the life of our 5 year plan. The additional $900 per month is only $50 more than we would be paying if we went with the $2,200 plan and paid the rental outside of the plan.
Basically it takes roughly $1,400 of our DMI that WOULD have gone to unsecured creditors and applies that to the rental loan.
Just a little background - rental property is valued at around $140k and is currently (and for forseeable future) rented out by family member.
The huge upside is that after 5 years, I will have this property 100% paid off, and it only costs me about $50 more per month than what I was already prepared to pay.
Downside is that since unsecured are getting almost nothing, it basically eliminates any flexibility we have with our plan for future adjustments.
Just looking for some general comments/thoughts about this. It seems too good to be true - paying off an asset I want to keep versus paying unsecured creditors. Hoping others with experience here could weigh in.
Thanks!
We met with our attorney last week and he had an interesting suggestion and I wanted to get some feedback/thoughts about it...
Our initial proposed payment was for $2,200. We were/are very happy with that plan. It kept our home, rental, and one vehicle outside of the plan, while putting our other vehicle in the plan (to bring interest rate down to Till).
Our attorney is now suggesting that we add our rental into the plan (with the one vehicle), and increase our payment to the trustee to $3,100. However, that change modifies the loan on the rental and pays it off (~$120k) over the life of our 5 year plan. The additional $900 per month is only $50 more than we would be paying if we went with the $2,200 plan and paid the rental outside of the plan.
Basically it takes roughly $1,400 of our DMI that WOULD have gone to unsecured creditors and applies that to the rental loan.
Just a little background - rental property is valued at around $140k and is currently (and for forseeable future) rented out by family member.
The huge upside is that after 5 years, I will have this property 100% paid off, and it only costs me about $50 more per month than what I was already prepared to pay.
Downside is that since unsecured are getting almost nothing, it basically eliminates any flexibility we have with our plan for future adjustments.
Just looking for some general comments/thoughts about this. It seems too good to be true - paying off an asset I want to keep versus paying unsecured creditors. Hoping others with experience here could weigh in.
Thanks!
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