Filing Tomorrow

[em96]

We signed all the paperwork at our lawyer's office today and he will be filing tomorrow. It will be a 60 month 100% repayment. My worst fear came true. They based the monthly payment on my past 6 months income which was higher than usual (lots of overtime). There is no way I can pay it without all the extra hours and there is no guarantee of that. He did say if my income changes, the payment can be adjusted, but I don't feel very confident about that. Also, I can't believe that my mortgage lender expects me to pay for all the foreclosure costs they racked up while they kept telling me they were working with me on a repayment or modification plan. This looks like a 5 year nightmare.

[lovemybugs10]

If there is one thing I have seen repeated on this board over and over- do not go through with it if you don't think you can make the payments!

Sorry your situation turned out to be so sucky.

[momofthree]

Can you wait another 6 months to file, or are you in foreclosure or being sued? If you can wait, then by all means wait. Just because you signed the paperwork doesn't mean you can't cancel it out. If it's not filed yet, then you can call your attny and tell him not to file it yet.

[em96]

We're filing to stop foreclosure. We fell behind on our mortgage. Our lender has been screwing us around for almost a year with promises of a repayment plan or a modification. All the while they have started and stopped foreclosure twice. Now it seems they arent going through with it even thought they tell us not to worry. They said they have a repayment plan but they have not sent it to us. I called 4 times over 2 months to say we didn't get it. They keep saying they will resend it. They have also been hanging up and transfering me from 1 person to another until they just disconnect me. Sale date is set for 8/4 - next week!!! What sucks is that we are now able to afford a repayment plan. And we can also start paying on our credit card debt...not much, but a little. So Ch 13 is the only way to save our house at this point.

[runnersdelig]

If there is one thing I have seen repeated on this board over and over- do not go through with it if you don't think you can make the payments!

Sorry your situation turned out to be so sucky.

I agree with this. If you are just going to fail the ch 13, why not plan it so you can succeed in a chapter 7?

[Cristo]

I would ask my lawyer if he has seen the recent Supreme Court case that says the plan should be based on your current income? There is a sticky posted on it. I don't see why your plan payment should be based on OT pay. If they did not do that you would not be in a 100% plan. I would not file it yet. Could you think about it over the weekend and call another lawyer? Sounds like yours does not want to fight for you or is letting a paralegal do your case. I hope I'm wrong and it all works out for you.

[em96]

Wife and I decided to let it be filed. Now that the shock has worn off a bit, I realized it can be done. It will be extremely tight. Its a 5 yr 100% plan, so the monthly payments can't go up. So I can lower my 401k contribution and change my w2 status. That will give me a little more in my paycheck. It won't even things out, but we should be ok. I've read a lot in this website about tightening your budget. Looks like we'll be joining the club. In the past couple of days, I've gone from sheer panic to being kinda relieved. We won't have to worry about foreclosure, or calls from creditors. And most importantly, we are gonna pay off our debt.

[LadyInTheRed]

em96, don't change your W2 withholding unless too much is being withheld. Even if too much is withheld, you are better off getting a refund that you can put in savings to cover emergencies and once-a-year expenses like vehicle registration and maintenance. The last thing you want during a Chap 13 is to end up owing taxes at the end of the year.

[em96]

LadyInTheRed, I won't owe at the end of the year. I'll just get a smaller refund. I don't plan on making that big of a change.

[csonly]

My lawyer told me that when filing chapter 13, if you get a tax refund, the trustee could take that for your creditors, not sure if this would really happen or not but wanted to put it out there. If you are paying backing 100%, I think this would be less likely to happen, but who knows for sure.

[kornellred]

If the trustee intends to secure your income tax refunds, it will be "so ordered" in the confirmation statement from the bankruptcy court. If your payments will repay 100 percent of unsecured debt, there would be no reason to take any more money from you.

[goon]

If your payments will repay 100 percent of unsecured debt, there would be no reason to take any more money from you.

Be careful with this, this can depend on the trustee, some trustees will still take tax refunds (or salary increases, or ...) in a 100% payback plan ( thus setting you up to payoff early ).

The reason some do this is that there is always a risk that your plan will fail prior to completion for some reason or another. With that in mind some of them want to get whatever DMI they can now, so that they can pay it out and get their % now, knowing that it is quite possible that tomorrow (or the next day or ...) you could lose your job and drop out of your 13.

Many trustees seem to be "Reasonable" in 100% payback situations, and not do this, but there are always the sticklers looking to maximize their cut.