Chapter 13 dismissed...now what?

[kp4193]

I filed chapter 13 in October 2009 and my payment plan was not able to get confirmed and is now being dismissed by the court on Monday March 29th, 2010. There simply enough income to survive according to the trustee. I have been making my all my trustee payments and mortgage payments since the filing. I had to file in the 1st place since my mortgage company wouldn't do a loan modification. I was getting close to a sheriff's sale. I have minimal debt other than the arrears balance on my mortgage. My attorney is telling me they still maybe able to help me. But he hasn't told me how. Frankly I think I got a bad attorney and I am so frustrated with him.

Now I'm worried the day they dismiss my case, I'll be foreclosed. I called the mortgage company, HomeEq, and they wouldn't review my case for a loan mod. Anyone have any ideas what to do in this case? I make enough money to pay my mortgage.

[momofthree]

This is a fear of mine as well, our budget is super duper tight.

Do you mind sharing some of the specifics of your income, budget, family size, etc? (I understand if you don't want to provide details)

[kp4193]

current mortgage payment is $3,811.00. My trustee payment is $1,500. Monthly income is $5,500.00. Not feasible according to the trustee. I'm single, not married, but I've been in my house for 5 years...was out of work for 10months so everything added up. I wish I knew what else I could do..

[justbroke]

If your Chapter 13 doesn't work, then that means you must be keeping something of value and that's the reason for your $1,500/month Trustee payment! Is it equity in the home?

Remember, even though a Chapter 13 allows you to keep all your stuff, it may not be feasible to do so. You are going to need to let go of something.

My initial analysis is simple. Your mortgage payment is 70% of your income ($5,500). If the $5,500 is your gross pay that a large portion of your income for housing. If that's your take home pay, that's still significant! Seriously, your housing cost shouldn't be more than 33% of your gross pay. You could push it to 40% but that's pushing it.

Something has got to give. Perhaps it's time to let the $3,800/month home... go. What do you think?

[SMinGA]

Simple math... $5500-1500-3811 = 189 per month.

On that $189, there is no way a person can eat, travel to & from work, pay utilities, and the other necessities in life.

I'm guessing the $1500 per month is based on a minimum amount you need to pay on priority debts. If so, then a lower plan payment is not possible. Not sure it would help - even if you paid $500 to the 13 that would only leave $1,189 and that still would be hard to cover everything else. A mortgage of $3811 on $5500 per month is not feasible.

My first question is what kind of atty submitted a 13 for such a budget? Did you pay him/her upfront? Seems kind of unethical even to me! Unless you had a typo on your income and/or mortgage amount, I don't think you'll be able to keep the house.

current mortgage payment is $3,811.00. My trustee payment is $1,500. Monthly income is $5,500.00. Not feasible according to the trustee. I'm single, not married, but I've been in my house for 5 years...was out of work for 10months so everything added up. I wish I knew what else I could do..

[becky20]

I agree, why would you even WANT to keep a house that was well over 50% of your income?! That would majorly stress me out. You said your debt, other than the arrears of your mortgage was minimal, then why is the payment so high? How many months was your mortgage late? Even if it were 10 months (the entire amount of time you were out of work, then 38000 (3800*10) divided by 60 (12 months times 5 years, the max amount you can be in a 13) then your payment is a little over 600. Add in atty fees and the trustee percent, that's still way less than 1500 a month - I'm guessing you have to pay more to save some sort of asset? I can understand why they would dismiss, after mortgage and payment you don't even have enough for groceries, let alone utilities or anything else.