Questions from a newbie - Please help!

[LadyInTheRed]

Now, I'm confused. If stripping the 2nd, do arrears have to be paid on both the 1st and the 2nd?

[forgotten]

I am sorry I don't quite understand. Does it mean I only have to pay to bring the account current during the plan, but not in addition to monthly payment? For example, let's say I am $60,000 behind for not paying for the whole year, and my regular monthly payment is $4,000. Is it correct to say that I only need to pay $1,000 a month for 60 months to bring current the $60,000 and I don't have to pay the other $4,000 in addition to $1,000 each month?

If those numbers were correct, then you would pay at least $5000/mo + trustee fees(around 5-10%) + lawyer fees rolled in the plan.
So you would be looking at around $5500, plus any other secured debts you wanted to keep.

If you didn't have to pay your current payment you would be $240,000 past due when your bankruptcy was over!

[momofthree]

Now, I'm confused. If stripping the 2nd, do arrears have to be paid on both the 1st and the 2nd?

No, just the 1st. The 2nd becomes unsecured debt and is paid out at the same percentage as the other unsecured debt.

[LadyInTheRed]

Thanks, momofthree. That's what I thought, but one of the comments above had me worried.

[SMinGA]

You would need to make all post-petition 1st mortgage payments on time. Your arrears on the 1st mortgage would need to be paid off in the life of the plan. You would probably make the regular monthly mortgage payments OUTSIDE of the plan. Here is an example with some #'s to it:

1st Mortgage arrears $60,000
Other priority debts $0
Trustee % to administer plan 7.5% (ranges from 5-10% depending on your district)
Regular 1st mortgage payment $4000

If your DMI allows for a plan payment of $1100/mo, then $82.50 goes to the trustee from each of your monthly payments. Leaving $1,017.50 for debt. Which would pay off the 1st mortgage arrears over 60 months and leave a little payment for unsecured debt.

In that example, you'd pay $1100 to the plan, and pay your $4000 per month mortgage payment. If you are not in a situation where you can AT LEAST your regular 1st mortgage payment AND ~$1100 to the plan, you may need to consider letting the house go and find somewhere less expensive to live.