Non Exempt Assets

[Smoker]

I'm looking at filing chapter 13 but also meet the chapter 7 requirements based on my last 6 month income. I've been on sick leave for about 5 months and have been cleared to return in 2 weeks, therefore the Lawyer thinks they will not allow chapter 7 based on future earnings. I have a cabin I would like to keep but exceeds the 11K Exemption I am allowed. The total value is around 25K. If my payments under chapter 13 do not amount to the 14K over the 5 years, will this force a sale of the asset? The only debt I have is about 50K upside down on mortgage which I plan on giving back.

Tim

[lrprn]

The only debt I have is about 50K upside down on mortgage which I plan on giving back.

If all the debt you have is your mortgage arrears, why are you filing bk? Just surrender the house and walk away, keeping your cabin. Are there other debts that you haven't mentioned that make it necessary to file Ch 7 or Ch 13 now?

[Smoker]

Because I will be going back to work and I'm pretty sure they will garnish my wages. Right now my 6 month wages is close to the median income (Wating on sick pay check stubs to confirm) but when I go back to work I'll be well over.

[momofthree]

Are you positive that you're in a recourse-state? Some states are non-recourse meaning that the original mortgage used to purchase the house cannot pursue you for a deficiency balance.

[Smoker]

Yes, they will allow them to go after the deficiency. If I don't meet chapter 7, I may just offer my Cabin deed (Value appox. 30K) and my current residence which the morgage is against , for forgiveness of the complete morgage. That would leave me with a second which I can manage. I used the means test and its telling me I would pay back about 48% of the loan if I can utilize section 42 for my current morgage and second, if not I would pay back 100% over 3 years.