chapter 13 help please new and stressed

[Deon213]

I have been on the internet all night researching chapter 13. I meet with a lawyer tomorrow.
My situation - I have a first mortgage that is current and I owe 312,000 and I have a 2nd with BofA that is past due 12,000 and I owe 125,000 my house is probably worth no more than what I owe. I thought I was in a hardship program with bank of america but they denied me and just sent me an intent to accelerate and foreclose if I dont pay 12,000 by Sept 8th. I dont have this money. I got a one time bonus in Feb and they are holding this against me. I have a 92,000 in credit card debt. I have taken hardship withdrawl on my entire 401k, no savings and all my CC cards I have enter into year programs to reduce the amount due.

I want to keep my house and my cars. will chapter 13 help me with my CC debt and the 12,00 I owe bank of America ? Can a 2nd mortgage foreclose? Is the second mortgage considered unsecure debt? what should I ask the lawyer tomorrow? If I file chapt 13 and get a raise what will happen? I forgot to mention in order to pay these bills I am claiming exempt and already owe 2800 in taxes. If I file chapt 13 when can i stop paying credit cards?

I am stressed and need help. HMM and so others you all seem smart. please help me. Now that I have wrote and read this post I am in tears......

[minan]

I have been on the internet all night researching chapter 13. I meet with a lawyer tomorrow.
My situation - I have a first mortgage that is current and I owe 312,000 and I have a 2nd with BofA that is past due 12,000 and I owe 125,000 my house is probably worth no more than what I owe. I thought I was in a hardship program with bank of america but they denied me and just sent me an intent to accelerate and foreclose if I dont pay 12,000 by Sept 8th. I dont have this money. I got a one time bonus in Feb and they are holding this against me. I have a 92,000 in credit card debt. I have taken hardship withdrawl on my entire 401k, no savings and all my CC cards I have enter into year programs to reduce the amount due.

I want to keep my house and my cars. will chapter 13 help me with my CC debt and the 12,00 I owe bank of America ? Can a 2nd mortgage foreclose? Is the second mortgage considered unsecure debt? what should I ask the lawyer tomorrow? If I file chapt 13 and get a raise what will happen? I forgot to mention in order to pay these bills I am claiming exempt and already owe 2800 in taxes. If I file chapt 13 when can i stop paying credit cards?

I am stressed and need help. HMM and so others you all seem smart. please help me. Now that I have wrote and read this post I am in tears......

I filed chapter 13 because I owe taxes. These are considered a priority debt and have to be paid. I am keeping my home and car as well as other personal property. A small percentage of my monthly payment will go towards the unsecured debt. My car payment, a secured debt, is part of my monthly payment and will be paid off in the chapter 13 plan.

I would ask the atty how long they have been practicing, how much are their fees, what can be done about the 2nd mortgage, if they specialize in bankruptcy, how many chapter 13 have they done, etc...

When I looked for an atty, I looked for attys who specialized in bk and had experience doing 13 as they are bit more complicated then 7. Stay away from bk mills...they can be a rip-off.

I was in the same boat as you in terms of feelings, crying all the time, not being able to sleep, etc.....it's been a few weeks now since I filed and I still have worries and sleepless nights, but it's getting better. I'm accepting that I did what was right for me.

Use this forum to learn as much as you can. I came to this site a few weeks before I decided to file and learned a lot on this site.

We are all here to help you and have been in your shoes...we're going through the same thing...

[LadyInTheRed]

I want to keep my house and my cars. will chapter 13 help me with my CC debt and the 12,00 I owe bank of America ?

It might. It depends on whether you can afford to fund a plan after paying all of your necessary living expenses. Your attorney can go over this in more detail.

Can a 2nd mortgage foreclose?

Yes. They aren't likely to if there isn't enough equity in the house to make it the trouble. If you file BK, an automatic stay will prevent foreclosure unless the stay is lifted.

Is the second mortgage considered unsecure debt?

If the house is worth less than the balance on the first mortgage, you can petition to have 2nd mortgage "stripped", which is basically declaring unsecured. Until that happens, it is still techincally secured debt.

what should I ask the lawyer tomorrow?

Everything you've asked here.
After giving them information about your financial situation, ask if they recommend you file BK? If so, Chap 7 or 13 and why?
Ask what they charge and what that fee includes.
Ask about their experience in BK. How many years? How many Chap 7 filings? How many Chap 13 filings.
Ask any questions that come to mind. There are no stupid questions!
Make appointments with a couple more attorneys before deciding on who to hire.

If I file chapt 13 and get a raise what will happen?

That depends on how much the raise is and your trustee. It could increase your plan payment. First thing you do if you get a raise is contact your attorney.

I forgot to mention in order to pay these bills I am claiming exempt and already owe 2800 in taxes.

Put your exemptions back where they should be! You are only making things worse by underpaying your taxes.

If I file chapt 13 when can i stop paying credit cards?

If you tell the attorney tomorrow that you definitely plan to file BK, he'll probably tell you to stop paying now. If you have to falsly claim exempt from tax withholding in order to pay them, you should already have stopped paying, IMO.

I am stressed and need help. HMM and so others you all seem smart. please help me. Now that I have wrote and read this post I am in tears......

Try to relax and get some sleep. You've taken a big step by making an appointment with a BK attorney. You want to be well rested so you can stay focused and get the most from the meeting.

Things will get better!

[Deon213]

Thanks so much for the quick replies. oh yeah, I forgot to mention my daughter is in college . I hope to have a good meeting tomorrow

[despritfreya]

Ok, the first thing you need to do is stop crying. The second thing you need to do is take a step back and relax. You are having a financial crisis, not a heart attack. While this crisis is devistating, it is not the end of the world and you will muddle through it.

A Chapter 13 will give you the opportunity to reorganize your debt and pay what needs to be paid over a period of 3 to 5 years by making monthly payments to a Trustee.

As it relates to the home, if you have equity in the home over and above the amount owed to the 1st mortgage and you want to keep the home, the month after filing you will have to resume your monthly payments on both loans. The missed payments owed to the 2nd will be paid out over the life of the Chapter 13 Plan. This is called "cure and maintain". You "cure" the arrears while maintaining the going forward payments. As long as you do this the 2nd cannot foreclose.

If there is absolutely no equity in the home after consideration of the 1st mortgage you can strip off the 2nd and treat the 2nd as unsecured. This means you will not be "curing" the arrears. If you strip off the 2nd, the 2nd will be treated just like any other unsecured creditor and so long as you complete the Chapter 13 and obtain a discharge, it will not be able to assert a claim against the house. Remember, you will always have to pay the 1st mortgage.

If you owe money on your vehicles the debt will be part of the Plan payment. Your 2008 taxes will also be paid through the Plan. Your unsecured creditors will receive what you can afford to pay them over the life of the Plan. This could be next to nothing or a lot, depending upon your ability to pay and the value of your non-exempt assets (if any).

You and your attorney will sit down and work out a plan that provides for proper payment. Formulating a plan is not rocket science. Certain things must be paid while others are not. The biggest consideration you will have will be wether or not you can afford the required plan payment.

What you need to do right now is have a nice glass of wine, watch some TV and then get good night's sleep. Tomorrow, you will meet with the attny and all of your concerns will be addressed.

[sofarsogood2]

Take a deep breath and try to relax. I was a basket case too, never thought it would happen to us. Was too embarrassed to tell anyone at first- now I don't care- it was the best financial decision we've made. Debt free at last!

Although I don't have enough information (income-7 vs. 13) and I'm not an attorney, I think you have made a very wise decision to meet with an attorney. That decision is the hardest part of the process.
.
If your house is worth less than the 1st mortgage, you may be able to strip the second. Normally seconds don't foreclose- the first has to be fully satisfied for them to get any money after a foreclosure. If you do keep the house, avoid reaffirming.

In a chapter 13, you will have to file schedules of all your expenses. What is left of your income after expenses is the monthly payment you will make to pay the creditors off. There is no set % you have to pay. It is called your DMI-disposable monthly income-that is the amount you pay.

Best tip is to make sure you include all expenses that you have- include some $ for things like copays, hair cuts and even a reasonable amount for entertainment. Think carefully about your expenses-don't forget any.

Keeping the car shouldn't be a problem. Usually you just keep making the payments. Try not to reaffirm it.

Taxes will have to be paid through the bankruptcy-priority claim. Make sure the attorney knows that you haven't been deducting them properly.

I think after you talk to your attorney, you will feel a bit better. It's best to interview several to make sure you are comfortable with who you pick -and you'll glean info. from each one. By the third one you'll know more and ask new questions. I went to 4 and chose the last. It was a small office- one attorney- and she did an awesome job.

There IS a light at the end of the tunnel. I felt much more relaxed after we filed. Wish we'd done it sooner.

Good Luck!

[Deon213]

Thanks so much. I cant sleep and might need to take some nyquil . my husband on the other hand is snoring . You will all be blessed for the help you are providing. you dont have to do this and I appreciate. It feels good to have someone to bounce stuff off. I am very proud and personal person so I dont share much with others. I need to find some other lawyers as well and meet with them. thanks

[needanswers]

It's so stressful and I know how you are feeling. I lost many nights of sleep and was sick with worry. You are wise to research. Knowledge really will help ease your mind and the people on this forum will not judge as many of us are all going through the same thing or have already completed a plan and stick around to help others.

The best advice I ever received was to approach this whole process as a business decision.

Interview more than one lawyer. Find one that you are comfortable with. Make sure that they have plenty of experience with Chapter 13s and lien strips if that is what you end up doing. Write down all of your questions and bring a pen and paper to take notes or jot down questions that come to mind during the meeting.

Good luck, keep us updated!

[jmac]

Take a deep breath and try to relax. I was a basket case too, never thought it would happen to us. Was too embarrassed to tell anyone at first- now I don't care- it was the best financial decision we've made. Debt free at last!

Although I don't have enough information (income-7 vs. 13) and I'm not an attorney, I think you have made a very wise decision to meet with an attorney. That decision is the hardest part of the process.
.
If your house is worth less than the 1st mortgage, you may be able to strip the second. Normally seconds don't foreclose- the first has to be fully satisfied for them to get any money after a foreclosure. If you do keep the house, avoid reaffirming.

In a chapter 13, you will have to file schedules of all your expenses. What is left of your income after expenses is the monthly payment you will make to pay the creditors off. There is no set % you have to pay. It is called your DMI-disposable monthly income-that is the amount you pay.

Best tip is to make sure you include all expenses that you have- include some $ for things like copays, hair cuts and even a reasonable amount for entertainment. Think carefully about your expenses-don't forget any.

Keeping the car shouldn't be a problem. Usually you just keep making the payments. Try not to reaffirm it.

Taxes will have to be paid through the bankruptcy-priority claim. Make sure the attorney knows that you haven't been deducting them properly.

I think after you talk to your attorney, you will feel a bit better. It's best to interview several to make sure you are comfortable with who you pick -and you'll glean info. from each one. By the third one you'll know more and ask new questions. I went to 4 and chose the last. It was a small office- one attorney- and she did an awesome job.

There IS a light at the end of the tunnel. I felt much more relaxed after we filed. Wish we'd done it sooner.

Good Luck!

So you can claim some entertainment allowance? I have asked my attorney that twice and she no you can't.

[needanswers]

It may depend on your Trustee. We were able to show a reasonable amount of entertainment. I can't remember exactly but I think ours was around $25/person a month.

So you can claim some entertainment allowance? I have asked my attorney that twice and she no you can't.

[jmac]

Thanks.

[espo1357]

I have been on the internet all night researching chapter 13. I meet with a lawyer tomorrow.
My situation - I have a first mortgage that is current and I owe 312,000 and I have a 2nd with BofA that is past due 12,000 and I owe 125,000 my house is probably worth no more than what I owe. I thought I was in a hardship program with bank of america but they denied me and just sent me an intent to accelerate and foreclose if I dont pay 12,000 by Sept 8th. I dont have this money. I got a one time bonus in Feb and they are holding this against me. I have a 92,000 in credit card debt. I have taken hardship withdrawl on my entire 401k, no savings and all my CC cards I have enter into year programs to reduce the amount due.

I want to keep my house and my cars. will chapter 13 help me with my CC debt and the 12,00 I owe bank of America ? Can a 2nd mortgage foreclose? Is the second mortgage considered unsecure debt? what should I ask the lawyer tomorrow? If I file chapt 13 and get a raise what will happen? I forgot to mention in order to pay these bills I am claiming exempt and already owe 2800 in taxes. If I file chapt 13 when can i stop paying credit cards?

I am stressed and need help. HMM and so others you all seem smart. please help me. Now that I have wrote and read this post I am in tears......

sorry to hear about your situation.
the second mortgage will do nothing if you have no equity. it soundls like you don't have equity, correct?

Anyway, as long as you are working, you will be fine in the 13.

Actually, it was very smart of you to come to this site and get information. There are people worse off than you, that don't even consider BK. Can you imagine that?

BK is a smart move for informed citizens that know their rights. In my situation (a 13), I can just go along and pay my mortgage with a good interest rate, have the second done with, and the cc's done with, and life is good. Even if I lost my job and couldn't support the 13, I will just call my attorney, and convert to a 7, and start over....

now, in the future, I highly recommend you don't touch that 401k or retirement savings for anything other than paying your rent or food on the table...

to dip into those savings to pay cc's is not good.

we have all been there. it will get better and better. just do yourself a favor, and don't bother telling others because most of the public is too stupid to understand the benefits of BK, and they really don't give a crap about anyone but their own financial condition anyway. its nobody's business.

good luck.

[momofthree]

Everyone else has pretty much answered all your questions. I just want to encourage you to take a list of your monthly budget (include yearly expenses divided by 12 as well to figure out the monthly amount), a list of your assets & their approx values, and your last couple of paystubs. That way, you'll get the most accurate info based on your particular case. Without that info, the attorney has to make generalizations which won't help you much.

[Deon213]

Thanks all this has helped so much