Chapter 13 payback figures

[minibux]

Is there any way to get a general figure as to what we would have to pay back in a Chapter 13? We have $14,000 in credit card debt, as well as a car payment of $335/monthly that we plan on keeping. When I had my consult with the BK lawyer, he gave me NO idea of what it may be. I know that there is no way of knowing, but, just a ballpark figure so we can be confident that we can manage it and should proceed with filing.

The basics....we live on 42K yearly with 2 kiddos and rent will be right around $1100/monthly.

Help!

[momofthree]

You're well under the median and you're not trying to save your home, so why are you going the chapter 13 route vs. a chapter 7? Have you considered settlement? At least one of my cards offered me a settlement of 25%, which for you would be around $3500. Attorney fees will probably run you $1500-$3500 to file bk, so settlement might be a viable option for you unless you owe back taxes or have a lawsuit against you or something....

[minibux]

Well, I have a Chapter 7 on me. Its only been 7 years so I have one year left before I could file again. I am on the deed of the house so we would have to do Ch 7 together which we cant now

Things are pretty dire financially, and we will also be surrendering our home as it has been for sale for a LONG time.

[SMinGA]

The 13 payment is your disposable income.

A good first step? WOrk on your budget. What are your regular bills? Rent/mortgage, insurance, utilities, other bills? Then what are your expenses? Groceries, household needs, clothing, medical, transportation, etc.

What is your net income - and what is left after all of the above? Its important that you are accurate and realistic on expenses by the way.

Depending on your district, your car payment might be paid off in the plan. If so, then you would not count your car payment in the budget.

Well, I have a Chapter 7 on me. Its only been 7 years so I have one year left before I could file again. I am on the deed of the house so we would have to do Ch 7 together which we cant now

Things are pretty dire financially, and we will also be surrendering our home as it has been for sale for a LONG time.

[SMinGA]

I was going to ask why BK on $14k credit card debt, but then saw your other post about surrendering the home. I guess you eventually expect a deficiency on the home?

Is there anything pressing you to file NOW? If not, I'd say to wait as long as possible.

[minibux]

We are going to start seeing the payments on the house get behind. We know that is ineveitable. I hate the idea of a Ch 13 and surrendering the house, but 7 cant be done for a year. We will be in total financial ruins by then

[Flamingo]

When did you file Chapter 7? You say 7 years ago..you fall under the old law then and can file after 7 years has passed, not 8 as changed by the new law which took place in October 2005. You need to learn how to budget after you get yourself out of this mess and plan your life accordingly and not go beyond your means or you will end up being a serial filer which is not a good thing for you, your family, having good jobs or for your life in general as serial filers fall under more scrutiny. Best of luck to you...

[minibux]

I have to say its not a matter of budgeting...my first one was a result of a messy divorce. The current situation is a matter of job loss. I really dont want to do this again But thanks for the info about the old laws vs. new laws.

[SMinGA]

Flamingo, I think you are mistaken... Once the law changed (6 became 8) it did not matter when one filed. One must have 8 years between ch 7 filings. There is no grandfather clause to this.

When did you file Chapter 7? You say 7 years ago..you fall under the old law then and can file after 7 years has passed, not 8 as changed by the new law which took place in October 2005. You need to learn how to budget after you get yourself out of this mess and plan your life accordingly and not go beyond your means or you will end up being a serial filer which is not a good thing for you, your family, having good jobs or for your life in general as serial filers fall under more scrutiny. Best of luck to you...

[SMinGA]

If you are current on the mortgage now, falling behind may actually help. Once behind, your mortgage co may be willing & able to work with you on an inhouse modification. We are starting this same process now w/ Bank of America.

Even if that does not help your situation, the process of foreclosure is not a quick one. It varies by state, but you could still have much time to work with. Rushing into a ch. 13 now is probably not a good idea. Rushing into any BK is not good I think.

We are going to start seeing the payments on the house get behind. We know that is ineveitable. I hate the idea of a Ch 13 and surrendering the house, but 7 cant be done for a year. We will be in total financial ruins by then

[minibux]

You recommend falling behind on the house and not filing yet? I was worried if we did that, it would really compromise being able to find a rental house when the time came. I am worried about not having a home for my family....

If we let the house fall behind, should we continue to pay our monthly credit cards and stay current on them?

I am very thankful for everyone's help, I am at a loss.

[Flamingo]

Flamingo, I think you are mistaken... Once the law changed (6 became 8) it did not matter when one filed. One must have 8 years between ch 7 filings. There is no grandfather clause to this.

Pre 2005 it was 7 years between filings for Chapter 7; now it is 8 years between Chapter 7's. It all depends when the previous BK was filed (he said 7 years ago but was that the discharge?). If the date of his filing is in 2002, he would be able to file 8 years from that date this year depending on the filing date. Otherwise, a Chapter 13 would need to be filed.

[SMinGA]

I think many people try to stay in the home as long as possible, and save up funds for moving. (First & last month's rent, additional security deposit to make up for bad credit, moving expenses.) If you stop paying your mortgage, save that $. If you ultimately do file ch. 13 any mortgage arrears would be priority debt to be repaid in the plan if you try to save the house. If not, you'd need to discuss w/ your atty in advance if its ok to have cash funds to prepare for the move. Or if you could postpone things long enough 7 could be an option. What month/year did you file?

It seems to me mortgage cos are not in the mood to help when you're current, I guess they see no need for help?

We did not fall behind as a strategy - but went a while where expenses exceeded income. Cut back where we could, looked for extra income. Eventually I found a 2nd job and that makes a difference. But by then all cards were in default and mortgage was months behind. Spoke to Bank of America earlier this week - don't qualify for HAMP as mortgage does not exceed 31% of gross. (Even before the 2nd job, it was right below 31%.) We don't have an ARM, don't have a house that lost 50% of its value. (Probably down ~10% from 3-4 years ago.)

They said we will qualify for an inhouse mod to mirror HAMP. Add missed payments (and waive late fees) to principal, rewrite loan to 2% for 5 years then increase by 1% per year til it gets to 5% where it will stay. We're 6.95% fixed now. The 2% will be a lower payment of $400+ per month, and the 5% will be almost $200 less than now.

We will ultimately still file ch. 13, as we have a 7 in 2005. (Car accident in 2003, I was in the hospital for 3 weeks and PT for months so lost alot of income. Should have filed sooner, but we avoided it as long as possible - until a creditor went for garnishment.) Income dropped in 2007 when hubby lost job/took one for less $. Dropped more in 2008 as his hours dropped. And expenses went up of course. Ours was a slow slide I guess you could say?

Sorry for going so long on me... For the time that this workout is in process, our mortgage is not in collections so no foreclosure process going on. If it works out, we'll have greater flexibility in our budget (so I may not have to work 60-70 hours per week) and no mortgage arrears. When we were current and only 1-2 payments behind, BofA would not do anything for us.

[SMinGA]

Pre-2005 it was 6 years between ch. 7 filings. In your post earlier I thought you were saying they could file with only 6 years between 7's if the last 7 was before the law change. That is not correct.

The law is 8 years. The law is not 8 years if you filed after 10/2005. If one filed in 2002 they cannot file again until 2010.

I filed in 9/2005 just before the new changes, and have met with several attorneys and they all agree that the current law (no grandfather clause) matters regardless of when I filed. I am not eligible to file again until 9/2013.

Pre 2005 it was 7 years between filings for Chapter 7; now it is 8 years between Chapter 7's. It all depends when the previous BK was filed (he said 7 years ago but was that the discharge?). If the date of his filing is in 2002, he would be able to file 8 years from that date this year depending on the filing date. Otherwise, a Chapter 13 would need to be filed.

[momofthree]

So you're not behind on the house yet? Here is what I would do, please realize that I am not an attorney and this is not legal advice, this is simply something to mull over....

Stop paying your mortgage. It will probably take a good year before they kick you out of your house. Save the mortgage payment, making token payments every couple of month to credit cards here and there to keep them from suing you. You should still come ahead each month over paying for rent somewhere. (Although some ppl manage to go 1+ year without making payments and not being sued--so you could risk it if you wanted to...) Then, about the time that you're being foreclosed on, hopefully the year will have passed and you can file chapter 7 on the credit cards and home....