Repayment amount question

[SMinGA]

There is the look back & means test (means test irrelevant if under median) and there is actual expenses on schedule J. If he has started a new job when you file, the income counts on schedule I. I - J determine disposable income.

If he has not started a job on the filing date, that is different. If he's been offered a job w/ a start date scheduled - that might count. I'm not certain. Best to discuss w/ atty.

Keep in mind: your house needs to be current if you file 7, and needs to stay current...

[SMinGA]

If you fall behind on the house again & file ch. 13 when your lookback is under median income - you can do 36 months. Most attys include majority of 13 fees in the plan, and you'd pay your arrears. Depending on what your true DMI would be, unsecured might get some $ too. Arrears & atty would be paid first.

Important to keep in mind: if you file & get discharged from 7, can't file another 7 for 8 years. Can't file ch. 13 (and discharge debts) for 4 years. Could file ch. 13 sooner as long as there was nothing to discharge. So worst case scenario, you could file ch. 13 in 6-12 months to catch up on the mortgage. Would be done when the mortgage arrears was done & atty paid - but would probably cost $3-4k in filing fees & atty fees plus a little more to the trustee. Not cheap, but a backup plan for sure.

In terms of 7 vs 13 I just don't know much about 13 but the idea of paying for five years just feels very daunting, kind of like one more thing hanging over us all the time. The idea of wiping the slate clean feels much better, but again, I don't really know much about 13 because it never occurred to me that we might be above the limit.

[momofthree]

His future income would not count on the means test, but it would count on the schedule I (current income), as long as your expenses on schedule J are high enough--sounds like they will be--then his future income won't matter much....

[ccfriend]

If you do a ch 13 your student loans will automatically go into deferrment.

[researchnerd]

The 6-month lookback is used to determine where you fall on the means test, and whether you are eligible for Ch7. Future income is used to calculate what you could potentially pay into a Ch13 plan. That's why SMinGA suggested you file after your DH is working again -- so you'd have something to fund the plan with. Right now it doesn't seem like you'd have anything left.

[momofthree]

Well, I'm going to disagree with the others and say I believe you can still get into a ch.7 as long as you time it right (before your dh gets a paycheck and after you have a couple of $0 months).

According to IRS standards, a family of 4 can claim:

$1372 for food, clothing, personal care, etc.
$240 for out-of-pocket medical expenses
$472 vehicle operating expenses (this is based on the Western Region)

Up to $489 each for 2 car payments

+

housing ($2100)
utilities ($400) guessing

+ daycare $1600

Then there's things like recreation, charitable contributions, other insurance (life, disability, etc), home maintenance (total around $300)...

Looking at the above expenses, as long as you're bringing home less than around $6500 a month with no car payments, or $7000 a month with 1 car payment, you should be able to get into a ch.7 no problem. Notice this also doesn't include your student loan payments....

I really think you can get into a 7....

[SMinGA]

I'm not disagreeing totally. They probably CAN do a ch. 7, I just wonder if doing a ch. 7 NOW is a wise move. Before there is adequate cash flow to cover necessary expenses I mean. If they do, I fear the house is going to fall behind - hard to make a $2100 mortgage payment on $4400 net income - and then options will be limited.

Well, I'm going to disagree with the others and say I believe you can still get into a ch.7 as long as you time it right (before your dh gets a paycheck and after you have a couple of $0 months).

[momofthree]

I'm not disagreeing totally. They probably CAN do a ch. 7, I just wonder if doing a ch. 7 NOW is a wise move. Before there is adequate cash flow to cover necessary expenses I mean. If they do, I fear the house is going to fall behind - hard to make a $2100 mortgage payment on $4400 net income - and then options will be limited.

Touche. ;)

[emiss]

I spoke to my attorney's office and they said that I should be fine for a 7 but they want to wait until August to file just to give us a month with no income to balance out that balloon payment a bit. They also want a bit more time to fine tune the case before the hearing. I'm feeling good about a 7, even though I totally here what some of you are saying about the value of a 13. My husband was offered the job he interviewed for (I'm so thrilled I could cry....have been actually...it feels like we may be able to dig out after all). He won't start until September and since it's a first year teaching job the pay isn't amazing, but it's a fantastic start. So, once we file I think we'll be able to keep up with the mortgage and other expenses. It will still be tight for a while, but for the first time I really think we'll make it.

I'm just so thankful to have found this forum. It's such a lonely, intimidating process and it feels good to hear from other people who have been through it already.

[momofthree]

YAY! Keep us posted on your progress!