Drowning and Planning on Filing for Chapter 13

[drowning123]

Can anyone share their personal experiences with filing chapter 13? Thanks. I am a single mom swimming debt. My mortgage is 3 months behind. My auto loan is current.

Mortgage is 1927/month
Auto is 370/month
Payday loans are 1300/month
Utilities are 1000/month
Fuel for car, traveling expenses to work, etc. are 600/month
I won't even include groceries.

I did not include installment loans which I stopped pay a year ago.

I am 1,087 over my monthly income. I am drowning!

Gross Income is 5875/monthly
Take home income is 4110/monthly

[Flamingo]

Hi Drowning123...have you done a forum search yet on Chapter 13? There are tons and tons of postings in here on personal experiences with Chapter 13 with many different experiences and views. For new posters we ask in the forum rules for new folks to search the forums for some answers before making postings because more than likely, you will find what you need somewhere in the forum. Educate yourself on Chapter 13. Many on here will advise you to get a free consultation with a BK lawyer (which I also recommend) ASAP (most give free initial consultations). Take with you a complete listing of all your monthly payments, bills, paystubs, sources of income, listing of assets, and copies of your most recent state and federal tax returns. You will feel much better after finding out exactly where you stand and what you can do in the state in which you reside.

[espo1357]

Can anyone share their personal experiences with filing chapter 13? Thanks. I am a single mom swimming debt. My mortgage is 3 months behind. My auto loan is current.

Mortgage is 1927/month
Auto is 370/month
Payday loans are 1300/month
Utilities are 1000/month
Fuel for car, traveling expenses to work, etc. are 600/month
I won't even include groceries.

I did not include installment loans which I stopped pay a year ago.

I am 1,087 over my monthly income. I am drowning!

Gross Income is 5875/monthly
Take home income is 4110/monthly

If you want to keep the house, you need to do the 13 in most cases, and especailly if you have a second mortgage that can only be stripped if you have no equity in the home.

Otherwise, go with the 7 if you qualify.

On the 13, I would wait until they start the foreclosure process on you, and then file the 13...because the arrears on your mortgage will go into your Chapter 13 payback, and will will likely not have to pay the usecured anything.

Also, stop paying the unsecured stuff right away. It will hurt your credit. But, you have to stop the bleeding, don't you?

You can save all that money you are not paying on the mortgage during that time to pay the lawyer and save up some cash for emergency.

It seems like filing is the right move. You just have to decide on the home, and find out if you even qualify for the 7.

the 7 is really the best best because you can get a totally fresh start. the 13 is torture a bit, and should only be used it you have assets worth keeping, like the home. If the house is way under and you don't see yourself living there long term, then I would consider walking.

Right now, you need to find a good attorney to meet with for a consult. Most attorneys are losers by the way and will tell you to file because they want your money. They often do not have your best interests in mind.

Overall, you are not is terrible shape compared to the people on this forum that have posted about their experiences. I was in much worse shape than you when I lost my job and fell almost one year behind.

My mistake was not filing the 7 when I had the chance. Although, being employed and paying off a 13 is better than unemployed and filing a 7!

good luck.

[momofthree]

Do you normally receive a tax refund each year? Your withholding is nearly $1800 each month, which seems extremely excessive, especially for a single mom. Simply changing your withholding so that you don't receive a refund each year, but instead get extra money in your paycheck each month can make a tremendous difference. Do you get child support or any other income?

If your withholdings are correct (break even each year at tax time) and you don't have any extra income, then ch.13 will not help you.

Mortgage is 1927/month
Auto is 370/month
Utilities are 1000/month
Fuel for car, traveling expenses to work, etc. are 600/month

=$3897 JUST for housing & transportation expenses. How are you feeding & clothing your children?

It's time to sit down and have an honest discussion with yourself. Your mortgage payment is half your income. Add in your extremely high utilities and there is 3/4 of your income. Add in your commute to work, and nearly ALL of your income goes towards your home.

How much is rent closer to where you work? How much would you save on utilities in a smaller home or apartment? How much would you save on gas (and car insurance for driving less miles) if you lived closer to work?

Another thing you can do if you are 100% committed to your home is to look to other areas to cut back. $1000 for utilities? Really? What temperature do you keep your home? Do you have cable tv? What is your phone package like? Do you have a yard that requires a lot of water? I'd bet (unless you have a HUGE house) that you could cut those expenses in half if you really wanted to.

I have an average 2000sq ft house and it's over 100 degrees outside most days and our utilities average less than $500 a month. We don't have cable tv or cell phones, we don't have long distance service on our phone, we downgraded our internet, we keep our house at 80 degrees (and have a balanced billing plan for our electric) and we try to conserve water the best we can. It's tough, but it's the only way we can afford to live because we, like you, want to keep our home.

There's not much you can do about your travel expenses except to buy a more fuel efficient car, or use public transportation. Have you considered trading in your current vehicle for a hybrid or compact car that gets better gas mileage? Do you have public transportation available to you?

Unless you make some massive changes, you simply cannot afford to keep your home.

You may want to seriously consider filing ch.7 & living in your home until you're kicked out. Save as much of your house payment as you can each month towards your "fresh start."

[momofthree]

Oh, and stop renewing those payday loans. They will be included in your bankruptcy. They will threaten you with jail and lawsuits. But they cannot throw you in jail, and they will have to go thru the normal procedure for getting a judgment in court against you just like any other creditor. The bankruptcy will make them go away and there's nothing they can do about it.

[SMinGA]

If you have not already done so - open a new checking account and change direct deposits, etc. Close out the old - and as others have said the pay day loans will be taken care of when you file. You'll have to deal with phone calls and such, but you're probably already doing that.

For utilities - check to see if you can get on a budget billing plan with your service providers. Will allow you to pay an average bill, instead of high bills some months and low bills others. The end result is the same - but its easier to budget and keeps your finances from falling apart when you get a big bill. And as momofthree said - look for ways to cut back. Its painful sometimes (been there, done that) but necessary for sanity & survival.

For your mortgage - is that a total of 1st & 2nd w/ escrow? If you have a 2nd, how much is that payment? How much do you owe on the 1st, and how much is your home worth now?

[LadyInTheRed]

I agree with all that's been said except for one thing. If you do plan to keep the house and file a Chap 13, don't stop paying your mortgage. If you have arrears that you need to include in your plan, it may force your plan payment too high to manage. If you can't continue to pay your mortgage after stopping all payments on unecured debt, you should walk away from the house. The exception is that if you are going to strip a second lien, you should stop paying the second mortgage.

[drowning123]

Thanks all. I'm filing Chapter 7. Not saving anything. I really need a "fresh start".

[drowning123]

By the way. I live in NY. 'Nuff said. Everything is expensive. My monthly travel expense is my train fare of $341. Yes, I shall try to rent somewhere closer to the city. My heating bill is just about $600 every month during winter. I do have a first and second mortgage - combined total of $2,577. Surrendering for sure!

[LadyInTheRed]

By the way. I live in NY. 'Nuff said. Everything is expensive. My monthly travel expense is my train fare of $341.

And I complain about my $140 per month in the SF Bay Area! And BART is generally a much more pleasant place than the NYC subways. It helps that it's not nearly as old and our weather is so moderate.