Question about Paying Mortgages before filing Ch13

[boochase]

I am sure it has been discussed but I can't find the discussion. I am planning to file Ch13 in the next month or so. I have already stopped paying my credit cards. At this time, my wife is not filing, just me. I am underwater on my home (Florida)--$192K first, 45K second, home value $188K; wife's name in on the bill I receive for my second mortgage, but not on the first mortgage. Should I stop paying both mortgages? Should I stop paying the second mortgage only? If I stop paying one or both, should I wait to file just before I get a foreclosure notice? I understand that Ch13 allows me to stop a foreclosure sale if filed before Notice. What is the best strategy here? Also, my DMI is lower than what my payment would be based on my nonexempt assets. Appreciate the comments.

[momofthree]

If your dmi is lower than the required payment, you'll just have to find/make room in your budget to support the plan payment. Otherwise, you'll have to either get rid of the non-exempt assets, or find an alternative to bankruptcy.

We were in the same position and had to cancel cable tv, downgrade internet, decrease groceries, and get rid of our home maintenance expense altogether in order to support a plan payment.

[SMinGA]

DMI lower than non-exempt assets: means you must find some way to make the payment in order to fund a feasible plan.

If you have a minimum amount that needs to be repaid to unsecured, then you either pay enough to cover it or give up assets.

As to your question, keep paying the 1st but stop the 2nd if you're certain this is the path you will take and you will be stripping the 2nd. If you don't pay the 1st, the arrears will go into the plan as priority debt meaning you'll need to pay off even more over the life of your plan. (Priority debt does not reduce what you'll need to pay to unsecured to cover your assets.)

One thing to discuss with your attorney: if your wife is on the 2nd, can the creditor after your plan is finished - pursue the wife for the remaining balance???

As to when to file? Do so when its best for you.