Ch 13 dismissal ? HELP PLZ

[Morgon64]

My husband and I filed Ch 13 March '06. Made all payments on time for 4 years, ended up with a dismissal after attorney incorrectly told us two years running that we could keep $2400 out of each tax return we got. There was no way we could make the lump sum back payment the trustee wanted (after she found out about this !) to modify our plan.

Our secured debts have been paid, we still have about $19,000 in outstanding unsecured now. (And yes, still VERY pissed at attorney.) Our financial situation HAS improved, and we can probably pay this off, although we are considering Ch 7 at this point. We have no significant assets other than the house which we have a considerable amount of equity in.

Problem is we haven't heard the first thing from any of the creditors that were included in the bankrupcy, and it's been three months. I don't want to stir up trouble, but what, if anything, should I do about this right now?

I looked at all our credit reports today, and the only one that is showing on there, of ALL the accounts (there were 10 plus, many of them with smaller amounts, under $1000) is a Bank of America card that was charged off and sold. It was originally about a $9000 debt.

According to the final tally I got last week, all the other debt is now owned by three companies. Again, not a word.

Does it just take this long to get the ball rolling? What should I expect? Are they going to come after us now with huge late fees and penelties (Hello, Chapter 7) OR perhaps with settlement offers? (Will do)

I'd like to keep as much of this crap from making it to our credit reports, hence the willingness to settle.

Any thoughts would be appreciated!

[NoTomatoCan]

My husband and I filed Ch 13 March '06. Made all payments on time for 4 years, ended up with a dismissal after attorney incorrectly told us two years running that we could keep $2400 out of each tax return we got. There was no way we could make the lump sum back payment the trustee wanted (after she found out about this !) to modify our plan.

Our secured debts have been paid, we still have about $19,000 in outstanding unsecured now. (And yes, still VERY pissed at attorney.) Our financial situation HAS improved, and we can probably pay this off, although we are considering Ch 7 at this point. We have no significant assets other than the house which we have a considerable amount of equity in.

Problem is we haven't heard the first thing from any of the creditors that were included in the bankrupcy, and it's been three months. I don't want to stir up trouble, but what, if anything, should I do about this right now?

I looked at all our credit reports today, and the only one that is showing on there, of ALL the accounts (there were 10 plus, many of them with smaller amounts, under $1000) is a Bank of America card that was charged off and sold. It was originally about a $9000 debt.

According to the final tally I got last week, all the other debt is now owned by three companies. Again, not a word.

Does it just take this long to get the ball rolling? What should I expect? Are they going to come after us now with huge late fees and penelties (Hello, Chapter 7) OR perhaps with settlement offers? (Will do)

I'd like to keep as much of this crap from making it to our credit reports, hence the willingness to settle.

Any thoughts would be appreciated!

WOW! I would be livid! To be in a CH13 for 4 years only to have it dismissed because of bad advice from an attorney would put me over the edge.

As to your question about not being contacted about the other debt or it not showing up on your credit report yet - 3 months isn't that long. My guess would be just as you indicated - it is simply taking some time for them to get the ball rolling.

You have about $19k in unsecured - what is your plan to settle that debt if you should get an opportunity like you mentioned? If you couldn't cover the $4800 for the tax refund issue and stay in your CH13, just wondering how you would settle?

[forgotten]

Does it just take this long to get the ball rolling? What should I expect? Are they going to come after us now with huge late fees and penelties (Hello, Chapter 7) OR perhaps with settlement offers? (Will do)

I'd like to keep as much of this crap from making it to our credit reports, hence the willingness to settle.

Any thoughts would be appreciated!

It may take some time, but they will soon be comming for their money.

Keep in mind $19,000 unsecured 4 years ago is probably closer to ~$50k now (default APR for the past 4 years). They will be trying to collect all the interest that accrued while you were in BK.

[Morgon64]

Notomato: Livid? That's a good choice, or WOULD be if I really had much energy to stir up these days. I have seriously got to the point that as long as I have a roof over my head, food on the table, and nobody is dying, I'll manage. I'm numb, essentially. This stuff ALWAYS happens. Ex: I had a previous Ch 7 years ago when a boyfriend stole cash advance checks out of my mailbox (I had paid off CCs and student loans and put the rest of what I owed in a low interest consolidation loan) and forged them. I had a large amount of open credit since I hadn't gotten around to closing the accounts yet. I didn't even realize the cash advance checks had been sent to me and then forged until he finally hit the limit on one and it bounced. What he did was put the money in an account of mine, take my ATM card (yes, he knew the code, but I never really had cash in that one so I didn't think it would matter, how wrong I was) and withdraw the money.

By the time I caught what was going on, it was to the point I couldn't pay those amounts. The fraud divisions laughed at me. Then the guy killed himself! Anyway, I was a divorced mother and struggling. I gave up and declared bankrupcy. I was in my early 30's at the time and had a spotless credit history. Those days are long over.

And that's just ONE story.

Skip to today, and what my plan to settle would be. My husband has been to Iraq twice (part of the reasons for our debts this time), and JUST got 40% disability from the VA, so our income is $700 more than it was before. I was HOPING (foolishly, obviously) that for instance, some of the smaller debts (like $1500), could be settled for, I don't know, 50% or something. I could make good faith payments and pay them off at settlement prices, one by one as I saved lump sums. IF we really kept our belts tight. The large amount we'd have to make payments on. I see now that was a pipe dream.

I think a Ch 7 may be looming. We have a very few assets here and there, but nothing I couldn't live without. For instance, a Dodge truck that was the beginning of the end. Husband bought without asking me (don't you think any purchase over $20,000 should be agreed on by both partners?) while we were already having financial problems. (Do you see a theme here? Money and men I get involved with?) Yes, we own the truck now, but it really truly is a lemon. We bought it used and lemon laws don't apply. It is currently not running for about the 80th time.

Yeah, 20/20 hindsight. I should have marched him and it right back to the dealer and consulted a divorce attorney. Problem was I was still in the middle of a nervous breakdown and generally non-functional. Hard to believe, but he actually has learned to budget and I brought myself back from lala land. So here we are.

That's the long story of why I gave up on "livid". I'll start drinking. Again.

NOW I choose to simply jump a hurdle at a time, since apparently life is going to be a track meet for me. Ya gotta laugh or you'll just be laying there with a tombstone as company.

Sooo...do I need to post now in the Ch 7 forum and get an idea of what our debt to income ratio needs to be for a Ch 7? I know it's harder these days. What does this sound like: Income is about $3300/mo net (including the disability), and I guess who knows what the debt is, anywhere from $19,000 to $50,000 (according to forgotten!)

Edit: If it even matters, probably posting all in the wrong places: Mortgage $720, misc bills (electric, insurance, gas, food, etc ad nauseum) about another $1000 give or take.

[momofthree]

Your income compared to debt matters very little. What does matter is whether you're over or under median income for your state and household size, and your income compared to your allowed expenses.

Here are the median income figures and IRS standard expenses: http://www.justice.gov/ust/eo/bapcpa...anstesting.htm

Also, you mentioned a substantial amount of equity in your home, so unfortunately, you may be forced into a ch.13 again if your state exemptions don't cover the equity....

Good luck!

[Morgon64]

TY Mom (hee hee). I'm in Florida and from my understanding, I'm good. I did do that much research on my own ;)

AND we are easily under median income for our family number. I'll look at the link you send re the other stuff. Thank you.

EDIT: Okay I looked at it. I think with our income and family size, we won't have the first problem. I am VERY VERY frugal and they allow almost twice what we actually spend.

Thanks again, that really helped clarify things.

[missny]

momofthree could you just explain what you mean by state exemptions not covering equity? if the state exemption for ny is 100K for joint filing does that mean if there is not 100K in equity in the home the couple would be forced into chapter 13 even if they were under the median for the state in income.
thanks. i am just comfused a bit on exemptions.

[Morgon64]

Missny...MY understanding is, for instance, if you are in state that gives you a $100,000 homestead exemption, you can exempt up to $100,000 in equity. If you own a house worth $200,000 and owe more than $100,000 you are fine. That $100,000 (or less) of equity in your homestead is exempt from the trustees hands.

Am I correct? Anybody?

[momofthree]

Missny...MY understanding is, for instance, if you are in state that gives you a $100,000 homestead exemption, you can exempt up to $100,000 in equity. If you own a house worth $200,000 and owe more than $100,000 you are fine. That $100,000 (or less) of equity in your homestead is exempt from the trustees hands.

Am I correct? Anybody?

Yes. If, for example, you have a house that is worth $200k, and you owe $150k on it, then you have $50k in equity. If your state allows you to exempt only $20k in equity, then the trustee may want to take your home and sell it to distribute the proceeds to your creditors, or alternatively, you could file ch.13 and pay in at least $30k over the course of your plan and keep your home.

In the above scenario, if you owed at least $180k and only had $20k in equity then you could keep your home with no issues. Also, if you owe what it's worth, or even more than it's worth, you also would be allowed to keep your home.

Hope that makes sense.

[justbroke]

Luckily, Florida is an unlimited homestead exemption State. I think the best scenario may be a conversion to Chapter 7. Under the median and military vet on disability should get you there.

Your biggest issue will be with the paltry exemptions in Florida on non-homestead items.

[Morgon64]

Well, with my paltry amount of "stuff" (no, really...I don't think we have anything that hasn't come from Craigslist or Goodwill for $100 or less), I'm not worried.

We've been making due on about $400-$500/month of "discretionary", and by "discretionary", I still mean gas, (luckily husband is a cop and gets to drive a police car to and from work, gas paid for), food for four people, and any and everything else. TRUE discretionary has been more along the lines of MAYBE the McDonald's dollar menu.

Good thing is we have a really beautiful piece of land - 10 acres- out here (yes, it's exempt, not in a municipality) and it is very very peaceful. I COULD be in some cramped little apartment or something.

Anyway, THANKS for the help guys...guess I'll be skipping over now to Ch 7 land. Ta ta!