Ch 13 and going through Divorce. Any Advice?

[NJ0169]

We had our 341 meeting last week and it went well. court suppose to confirm the case tomorrow according to my lawyer. Now, My wife and I are going to be filing for divorce within the next few weeks. We do own a house. any idea what to do here? Ideally, I want to sell the house, would I be allowed to keep some of the proceeds if there is any to pay for security deposit for my self and my wife since we need 2 apartments. Any thoughts would be greatly appreciated

[SMinGA]

It might not be a good idea to confirm the plan...

What are the reasons for filing ch. 13? (Instead of 7, I mean.) To save the house if you are currently past due, to protect non-exempt assets, or because you have too much income/dmi for a ch. 7?

You may want to consider your income/expense scenario for having 2 distinct households. It will probably cost more total to pay 2 rents, 2 sets of utilities, etc. than your current plan allows for since your current plan is for 1 household. And you'll need to work out who is paying/receiving alimony and/or child support - and adjust withholdings for new filing status. So net income will need to be recalculated for each of you.

From an old thread it looked like the house was worth approx. what you owe on it. Trying to sell it may be a waste of time, if you'd lose any potential profit (if you even find a buyer in this market) to selling fees. May consider letting it go, saving up mortgage $ for a few months for you to each rent your own place.

Last, as if that were not enough to consider, if your current ch. 13 is a household of 4, you'll now be a household of 1 and a household of 3 (or some other combination) so if you were filing ch. 13 because it was the only option - one or both of you may be able to do individual ch. 7's in the near future. Current DOJ median income figures were updated recently. Your old post said gross of $12k per month so $144k per year. Median in NJ for 1 person is $59k. Median for 3 is $85k, 4 is $102k.

[NJ0169]

Thank you for your reply. We filed ch13 because the income limitation. We were trying to save the house but now with divorce around the corner, it does not matter anymore specially nither of us can afford the house with a single income. as of now we are current on the 1st and 2nd mortgage.


would stop paying mortgage now affect our ch 13 in any way?

after divorce my wife may qulify for CH7 but i will not. in this case i prefare keeping the current payment plane since its doable and acceptable. Your thoughts

[SMinGA]

The problems I see with keeping the current plan:

1. The current payment plan considers total net income. This may change as withholding/filing status changes. (From married joint to single & head of household, is my guess.) Child support/alimony would move net income from one to another but not change the net total.

2. The current payment plan considers your current mortgage, utilities. These are going to change.

You probably will not have the option of keeping the current payment amount actually, as you'll have to update your petition (if you are even able to keep the current case open) with new income, expenses. That will change your DMI. Stopping your mortgage payments is a part of that overall adjustment.

Then, depending on who gets custody and if you pay child support, that may help get you closer to a ch. 7, or at least keep your ch. 13 payment reasonable. (If your ex does indeed qualify for ch. 7 as an individual.)

I honestly don't know if you'll be able to continue in a joint ch. 13 if you are divorcing. If you have not yet discussed this topic with your atty, that is a phone call or in person appointment best handled ASAP.

[NJ0169]

Thank you for your comments. When i meet my att. now i have better idea of what to ask