Chapter 13 - 2nd mtg strip - how much goes to trustee
We have a $30,000 2nd mortgage that we are considering stripping on a Chapter 13. Will the trustee take this amount and average it out over 60 months? If so - then we will probably not want to strip the 2nd - because we would not be able to make the payments - based on our DMI. Thanks!!
-
-
No, the trustee will not take this amount and average it over teh 60 months of your plan. If you are successful in stripping your 2nd mortgage then they simply become an unsecured creditor and are paid like any other unsecured creditor in your plan. -
We will be paying back 100% to our unsecured creditors. Therefore, I assume that we will have to pay all of the $30,000 - over the 5 year period. The only reason I bring this up - is that we current pay the second mortgage at $260.00 per month - and given our DMI - that amount is cheaper than spreading out the $30,000 - over 5 years. Any thoughts on this? ThanksOriginally posted by NoTomatoCan View PostComment
-
It all depends on what type of available DMI you have. If you are at a 100% payback AND have an additional $500 of available DMI per month (plus trustee fee), then you are right, it would simply spread the $30,000 out over the life of your 5 year plan ($30,000/60 = $500 then add in trustee fee).
And while it is more expensive than the $260 you are paying now, at least that debt would be gone after 5 years.
It all really depends on your available DMI. Even though you are at a 100% payback now, adding this $30k debt might put you at a lower payback %, in which case you would not payback the entire amount.Comment
-
Sorry - I just realized I forgot something...
You have to be including the $260 somewhere in your plan as a necessary expense. So really you only need about $240 of additional DMI (plus trustee fee on $500/month) more per month and you will be paying back at 100%.
So assuming a (high) 10% trustee fee, then if you currently have $290 of DMI available above and beyond what it takes to payback at 100% you will be paying back the 2nd mortgage at 100%.Comment
-
Mine get about 25%.
Its a decent deal, but with the home underwater, its not all great.Comment
Comment