1st meeting with Attorney today!!

[deepinit]

I made it to the next step and had my consultation - the attorney is recommending that we do a Chapter 13 and do a lien strip with our 2nd mort. - he is suggestiong a 4yr 20% payback at about $700 per month.( we owe about 90k CC and 48k on a 2nd - we are about 10k upside down on the first mort. )
I would still like to consider a chap 7 though and be done wiht all of the cc debt - his thinking is it would be cheaper over all to do a 13 and keep our house and things than to do a 7?
We do need to get a car for my wife though - her lease is up and he is saying we can only have a $3500.00 car - (my car is paid for) my problem is that i dont know what $3500 dollar car will last for 4 years - it needs to be a van as we are a family of 7.
Does this make sense? what if any questions should I be asking upon my follow up.
He needs a check for fees and an appraisal - and tax info on the next visit.

[momofthree]

Does he mean equity of $3500 in a car? If you can secure 100% financing, then you wouldn't have to worry about the exemption limit.

Also, how did he come up with a 4-year plan? From what I understand, it should be either 36-month or 60-month unless you're in a 100% plan that pays off early....

As a side note, $700 x 60 payments = $42000. You may want to consider filing chapter 7 with hopes of settling the 2nd later on. Even if you could only get them down to a 50% settlement (which is a pretty high percentage), that would only be $24,000. I believe (someone correct me if I'm wrong), that filing the 7 removes any tax liability from a settlement agreement.

Of course, I don't know if you even qualify for a 7, but from your post, you make it sound as if you have a choice between the two options.

[sheilaE]

I have a questions regarding keeping the house-we haven't filed yet, but when we do, we want to keep our house. Does that mean we "have" to do a 13?

[momofthree]

I have a questions regarding keeping the house-we haven't filed yet, but when we do, we want to keep our house. Does that mean we "have" to do a 13?

No. You just have to keep paying your mortgage.

[deepinit]

He said there were 3 - 48 - and 60 month options - at 36 months the payment was very high - he did say 48 months though not 60. He has to run the numbers to see if we qualify for a 7 - i think I make too much - (90k) but he is going to run the numbers and give me some options.
Are you suggestiong just letting go the second and hope to settle with them?
if so is there still a lien on hte property or taxes owed on the difference?
Thanks for your input.

[lrprn]

I would still like to consider a chap 7 though and be done wiht all of the cc debt - his thinking is it would be cheaper over all to do a 13 and keep our house and things than to do a 7?

You didn't share how much your second mortgage is. You can only strip it if you file Ch 13. If you'll save a great deal more over the next five years by getting the second mortgage stripped than if your unsecured debt is gone quickly by filing a 7....well, then that's a great reason to consider Ch 13.

You should meet with 2-3 more experienced bk lawyers in your area before deciding on one. That way you'll know more about what's possible in your situation and hopefully find the lawyer who will do the best job representing you no matter which bk chapter you file.

[momofthree]

He said there were 3 - 48 - and 60 month options - at 36 months the payment was very high - he did say 48 months though not 60. He has to run the numbers to see if we qualify for a 7 - i think I make too much - (90k) but he is going to run the numbers and give me some options.
Are you suggestiong just letting go the second and hope to settle with them?
if so is there still a lien on hte property or taxes owed on the difference?
Thanks for your input.

I'm suggesting that you weigh all options before making the decision to proceed with a chapter 13. Some people decide to file chapter 7 hoping to negotiate with the 2nd and settle after discharge. If your payback into the chapter 13 is going to be close to the balance of your 2nd (which it sounds like it might based on the numbers you posted), then it does deserve consideration.

I cannot advise you either way. I simply think you should read up on it, do some research and weigh your options.

I also think you should speak to a few more attorneys before settling on one.

GL in your journey!