GREAT NEWS FOR CHAPTER 13 DEBTORS, U.S. Supreme Court

[JimBK2009]

Well, I feel sorry for your clients, sorry to say. If you are pushing people into a chapter 13 to do a lien strip and can't get them qualified for a chapter 7, you have no creativity. FFS, have them file a chapter 7 and settle the 2nd mortgage for 5 or 10%, WTF are you putting these people into chapter 13 payment plans. How many of these token chapter 13's are actually making it to discharge, if its anything close to the nation average, (not many), then what have you really accomplished.

Oh come on, are you really telling people to just "settle with the 2nd mortgage company for 5-10%" rather than file a BK and get complete protection from the court.

Do you realize,

1) The cost of BK at $3600 is a lot cheaper most of the time than spending all the time and effort trying to settle with the 2nd,

2) The 2nd mortgage company holds the deed to the property and you've got to get it back from them,

3) You have no protection from foreclosure if the 1st and 2nd mortgage are from the same lender. The 2nd can foreclose in these cases since the 1st will always give them permission, AND

4) Lately 2nd mortgages have begun foreclosure proceedings against someone even though they have no equity past the first mortgage and it forces the client to either go into court and fight them off (a costly endevour to say the least) or risk losing their home,

Its amazingly bad that you would tell people to just settle on their 2nd and deal with all of the legal risks rather than get full protection from the bk court and pay $3600 over 3 years. Amazing.

[justbroke]

I think HHM is just saying... walk away. I'm in that position and I'm prepared to just walk. I converted my Chapter 13 to a Chapter 7 because I initially wanted to save property. Now, I'm post discharge and the Mortgage company modified my mortgage and dismissed their foreclosure action in the local court. I have no equity beyond the first, and about 5% upside down (when using the first only).

I could not see being in a Chapter 13 for the next 3 years (I did 2 years out of 5), just to strip the second. Just wasn't worth it for me.

[catleg]

Well, I feel sorry for your clients, sorry to say. If you are pushing people into a chapter 13 to do a lien strip and can't get them qualified for a chapter 7, you have no creativity. FFS, have them file a chapter 7 and settle the 2nd mortgage for 5 or 10%, WTF are you putting these people into chapter 13 payment plans. How many of these token chapter 13's are actually making it to discharge, if its anything close to the nation average, (not many), then what have you really accomplished.

This has got to be the first time I've ever seen HHM advocate debt settlement rather than using the bankruptcy process. :-)

I'm not here for an argument

[justbroke]

I'm not here for an argument

I love that skit. Only I wish it was the entire skit from end to end!

[catleg]

I love that skit. Only I wish it was the entire skit from end to end!

Then you'll like this one better

[JEM]

I'm reading and re-reading this thread because I'm not sure I completely understand.

We are really on the borderline (over, under, over, under depending on dh's pay that week) of qualifying for a Ch7.

The reason is because his company has done quite a bit of hiring the last 6 months and he trains their new employees and gets training pay. This will NOT be recurring money, but sure has boosted his income to look like he makes more than he will in the future.

I lay awake at night worrying that we'll get put in a Ch13 because of this income, and we'll have to make trustee payments based on income they think we'll keep getting, but won't.

Does this mean "temporary" income like this won't be counted into a payment plan?

[HHM]

This has got to be the first time I've ever seen HHM advocate debt settlement rather than using the bankruptcy process. :-)

I'm not here for an argument

LOL, true enough.

I am more a fan of settlement when it comes to 2nd mortgages. Also, although I often rail against debt settlement, I do have a set of criteria for when it makes sense, the thing is, most people who initially go down the debt settlement path have no rules or decision criteria to really determine if it makes sense.

[catleg]

I can see points for both sides here, but given that you already have the privilege to time your BK filing to minimize your 6 month lookback, and thus your forward projection; it seems to me the 36 vs 60 month issue for above median debtors is a big issue. Although the reality is it probably doesn't impact a whole lot of folks, but the ones it does impact it is a real kick in the nuts.

[dani]

For HHM:
Can u really settle a 2nd lien for 5-10% successfully? (Partial Equity as of now)
What about a 3rd? (no equity at all - as of now)

[espo1357]

I think HHM is just saying... walk away. I'm in that position and I'm prepared to just walk. I converted my Chapter 13 to a Chapter 7 because I initially wanted to save property. Now, I'm post discharge and the Mortgage company modified my mortgage and dismissed their foreclosure action in the local court. I have no equity beyond the first, and about 5% upside down (when using the first only).

I could not see being in a Chapter 13 for the next 3 years (I did 2 years out of 5), just to strip the second. Just wasn't worth it for me.

JB,

I am in the same spot. Its been about 8 months of the BK 13 for me, and the payments combined with the underwater status of over 100k, combined with a job that is ending soon, make conversion to a 7 the smart move in the long run.

I am assuming your property was a primary?

Mine is. That is what is keeping me in the 13, the fact that this is my primary residence. I figure since I live in the home and get value out of it, that I should continue to pay. But, as you stated, the 13 for that long of a time is a joke.

And the home is looking at, at least 10 years before it gets any equity.

[Gigi1999]

I have a question on this:

I was in a wreck that totaled my car 01/21/11. We have a Motion to Sub. Collateral on the 3 of March. If they apply what the ins. company gave me for my car and pay off the loan thru the lender...will they adjust our bk so my payment is lower. If we have to lay all of our income papers on the table, do we submit any side work my husband has been doing on the side to make up for a 10% paycut that happened AFTER we filed? Origionally, they had taken a job that he did 4 months prior to our filing and added that as part of our income...so after that fell off and the 10%, well, you see what I am saying. It sort of left us in a bind and he had to start doing more. We are FINALLY feeling like we aren't stretched tightly!

[mikewindy]

So does this mean if I filed Not husband chapter 13 if he get bonus from work do I have to turn it into trustee. I am alittle confused about this have not even went to 341 meeting yet. But he might or might not get Christmas bonus. Sometimes he get Fall bonus and spring bonus but not all the time depends what owner of company wants to do at that time.

[newbie2]

So does this mean if I filed Not husband chapter 13 if he get bonus from work do I have to turn it into trustee. I am alittle confused about this have not even went to 341 meeting yet. But he might or might not get Christmas bonus. Sometimes he get Fall bonus and spring bonus but not all the time depends what owner of company wants to do at that time.

This would be a question for your attorney, as the non-filing spouses income can be treated differently from district to district. Note: If your trustee requires tax returns, then it may very well be that they want "all disposable income". Ask your attorney how this is is normally treated in your district.

[Salley906]

Wow! I'm new to the forum, considering BK and am just researching and taking mental notes. Can someone tell me why only 40% of bk13s only make it through the plan?

Well, I feel sorry for your clients, sorry to say. If you are pushing people into a chapter 13 to do a lien strip and can't get them qualified for a chapter 7, you have no creativity. FFS, have them file a chapter 7 and settle the 2nd mortgage for 5 or 10%, WTF are you putting these people into chapter 13 payment plans. How many of these token chapter 13's are actually making it to discharge, if its anything close to the nation average, (not many), then what have you really accomplished.

[justbroke]

Wow! I'm new to the forum, considering BK and am just researching and taking mental notes. Can someone tell me why only 40% of bk13s only make it through the plan?

While the 60% failure rate includes those that end up converting to Chapter 7 (for one reason or another), the fact is that many people can't or refuse to budget and stay "in plan". It's that simple.

(For those that convert, it's usually because additional issues are affecting the ability to make Chapter 13 payments, such as job loss or less than "full" employment, illness, divorce, etc.)