Can I file ch13?

[etechjc]

No or neg equity in everything, No assets to speak of, Currently only income is $1900 govt income (SSI, SSDI type). Lost job income about 3 months ago and can no longer afford to feed the family and keep up the $600 in cards. We are currently $44K over 4 cards (3 of which citi owns) and $20K in second mortgage and I beleive after late fees and everything is done it will abit more.

1st mortgage is 30yr $79K owed out of $80K 6% fixed,
2nd mortgage is 30yr $19Kowed out of $20K 10% fixed, I am not currently behind on either mortgage.

House is maybe worth $80K, It is in really bad dissrepair and we can't afford to fix it up until I find another job.

The only reason I am considering Ch 13 is that it is my understanding we might be able to strip the second mortgage, But that can't be done in ch7. That And I wouldn't mind paying a bit back of what we owed, I do feel bad for not paying my debt.

[newbie2]

No or neg equity in everything, No assets to speak of, Currently only income is $1900 govt income (SSI, SSDI type). Lost job income about 3 months ago and can no longer afford to feed the family and keep up the $600 in cards. We are currently $44K over 4 cards (3 of which citi owns) and $20K in second mortgage and I beleive after late fees and everything is done it will abit more.

1st mortgage is 30yr $79K owed out of $80K 6% fixed,
2nd mortgage is 30yr $19Kowed out of $20K 10% fixed, I am not currently behind on either mortgage.

House is maybe worth $80K, It is in really bad dissrepair and we can't afford to fix it up until I find another job.

The only reason I am considering Ch 13 is that it is my understanding we might be able to strip the second mortgage, But that can't be done in ch7. That And I wouldn't mind paying a bit back of what we owed, I do feel bad for not paying my debt.

You can file for Chapter 13 if you want to strip the 2nd mortgage, but be careful and have an appraisal done or a market analysis by a real estate agent. Your market value must be less than the amount owed on the first mortgage.

Also, with so little income coming in, would you be able to rent a home for less money than your current 1st mortgage payment?

[NowImDownInIt]

IMO, with the information given, you may not have a fundable plan. I am a big supporter of ch. 13 for those who can do it, but I think that a ch. 7 would benefit your family more. You seem okay with stripping 20k of debt from the second mortgage but your family would definitely be better off stripping the 44k of credit card debt.

[jacket]

Hello NowImDownInIt,

...what do you mean by $480 monthly for 54 months at 100%? Do you have to pay 100% of your debt that you owed to creditor by filling chapter 13?

[etechjc]

I was under the understanding that you only paid pack a percentage of your debt over a 5 year period and then the rest is discharged. My income can only go up, We are at the minimum that we can ever get barring change in laws. Would it not be better to pay back a portion of $64K+ over 5 years, Than to just discharge $44K+?

As far as paying less by giving up the home and renting. Currently I pay $179 amont for the second and $545 month for the first, We are a family of 4 with a 4bedroom house. For us to be even remotely comfortable we would have to rent at least a 3 bedroom house. we just helped a friend of ours look, and even in some of the worst parts of town the least we could find a 3 bedroom house for was $600 a month. And we will Never have equity in a rental. Also I work on my own car to save money, So I would need a garage which further increases what it would cost to rent. On top of that we would have to find a place where the landlord would let us rent even due to our crappy credit.

[lrprn]

Hello NowImDownInIt, ...what do you mean by $480 monthly for 54 months at 100%? Do you have to pay 100% of your debt that you owed to creditor by filling chapter 13?

I don't see what you quoted in NowImDownInIt's post???

[lrprn]

I was under the understanding that you only paid pack a percentage of your debt over a 5 year period and then the rest is discharged.

Filing Ch 13 means you and your lawyer have to complete the required Means Test and Schedules forms for Ch 13. Whatever disposable income is calculated on the Means Test or on Schedule I minus Schedule J (which one depends on your local bk court's practices) becomes your monthly Ch 13 payment. Your Ch 13 plan is completed successfully when (1) you pay the confirmed number of payments in your plan, or (2) your payments pay back 100% of the amount owed to your unsecured creditors who file claims to be a part of your plan.

Would it not be better to pay back a portion of $64K+ over 5 years, Than to just discharge $44K+?

Only you working with an experienced bk lawyer can give you the answer to your question.

[LadyInTheRed]

I don't see what you quoted in NowImDownInIt's post???

It's in NowImDownInIt's signature - a description of her own plan.

[etechjc]

I hav a question, How is the value of the house determined? Does the Trustee order a appraisal, Or Do I?

[lrprn]

I hav a question, How is the value of the house determined? Does the Trustee order a appraisal, Or Do I?

Your house's value can be determined several ways - you estimate the house's value yourself, the value is set by a 'comps' comparison done by a realtor that shows what similar houses in your neighborhood have sold for recently, or by a certified home appraisal that you pay for. Which will be acceptable to your trustee depends on how interested the trustee is in the value of your home and the customs in your local court.

If your trustee thinks the value you've listed is too low and there's a significant gain for your creditors by challenging your value, then he/she may order a court-approved home appraisal to be done and paid for by the court.