No HOPE on home mod now CH13 ??? HELP

[Elidee143]

Hello newbie here! we have been trying to get our home modified for about 8months now and we haven’t been approved for different reasons 1st time (took them 5months to give us an answer) and it was that they couldn’t use my husband unemployment income and my income was too low 2nd time they didn’t receive paper work in a timely manner (I have proof that I did) and this last time my husband is back to work and we can start making payments but they are saying they can’t use his income because he is self employed and needs 4months profit and loss statements. So foreclosure date is DEC7 and they are not willing to extend it for another month and reevaluate our case because Jan7th would be 4month at the job. So we have no option but to file for chapter 13... Saw a lawyer yesterday and was told we can file and that our monthly payments would be around $650 a month (for a $44,000) debt is not a lot of savings from what we pay monthly $940 but it SAVE OUR HOME!!! All of our debt is current except for the 8months that we owe on our 1st loan....about $9000 all we are asking is for that amount to be added to our loan and for us to be allowed to start making payments/
I’m really upset because these banks prefer to screw everyone over instead of HELPING now my husband credit is ruined because we have to save our home grrrrr.....

Question: we have one credit card that has about $1000 in it and we have had our microwave get burned on a stormy night the cost to replace it is about $230 and my kids have no winter coats can we use our credit card to buy that I don’t think it would be more then $500... I have read where it would be considered fraud if you buy anything within 90 days of filing for BK that’s considered luxury... We haven’t used our cc in about a year because we were extremely short on MONEY

Thanks

[LadyInTheRed]

Don't fall off the cc wagon now! If you know you will file, stop paying your credit cards and buy what you NEED with cash. If you can't pay cash, do without the microwave. It is not a necessity. Even if you can pay cash, consider doing without for a while. Or, try Craigslist. I've seen many free and $20 mirowaves there. I tried to give a microwave away on Craigslist and couldn't! If you don't have enough cash to buy new winter coats, try a thrift store. Do you know anyone with bigger kids who may have hand-me-downs?

That said, while using your credit card when you know you can't pay it back could be presumed to be fraudulent, if your children will otherwise freeze, ask your attorney the consequences of using the card to buy coats. Don't ask him if you can do it, because he can't advise you to incur more debt. Just ask him what would happen if you did. It's probably not enough money for a creditor to fight about. And I believe that the worse that would happen is that you would have to pay that particular debt because it wouldn't be discharged. But, again, DON'T DO IT! You aren't going to have the option to use a CC during your Chap 13, so learn to cope without it now.

You say $650 a month is not much of a savings. Just at the surface, I'd say saving $290 a months is pretty significant. That's over $17K over 60 months. I played around with a credit card calculator. If you pay $940 on $44,000 of credit card debt at 10%, it will be paid off in 60 months. Paying $650 a month it would take 100 months to pay off. Don't know what your interest rates are on your cc debt, but you can run different rates at http://www.bankrate.com/calculators/...alculator.aspx.

Add in the fact that your mortgage arrears would be paid in the plan, and it sounds like a Chap 13 will give you significant savings in addition to saving your house. If a Chap 13 is inevitable, you might as well look at the bright side.

[Flamingo]

Hello newbie here! we have been trying to get our home modified for about 8months now and we haven’t been approved for different reasons 1st time (took them 5months to give us an answer) and it was that they couldn’t use my husband unemployment income and my income was too low 2nd time they didn’t receive paper work in a timely manner (I have proof that I did) and this last time my husband is back to work and we can start making payments but they are saying they can’t use his income because he is self employed and needs 4months profit and loss statements. So foreclosure date is DEC7 and they are not willing to extend it for another month and reevaluate our case because Jan7th would be 4month at the job. So we have no option but to file for chapter 13... Saw a lawyer yesterday and was told we can file and that our monthly payments would be around $650 a month (for a $44,000) debt is not a lot of savings from what we pay monthly $940 but it SAVE OUR HOME!!! All of our debt is current except for the 8months that we owe on our 1st loan....about $9000 all we are asking is for that amount to be added to our loan and for us to be allowed to start making payments/
I’m really upset because these banks prefer to screw everyone over instead of HELPING now my husband credit is ruined because we have to save our home grrrrr.....

Question: we have one credit card that has about $1000 in it and we have had our microwave get burned on a stormy night the cost to replace it is about $230 and my kids have no winter coats can we use our credit card to buy that I don’t think it would be more then $500... I have read where it would be considered fraud if you buy anything within 90 days of filing for BK that’s considered luxury... We haven’t used our cc in about a year because we were extremely short on MONEY

Thanks

You are looking for permission to use your credit card when you know you shouldn't use it. Also, incurring debt prior to BK which you know you will not pay back is called fraud. You will be questioned on charges made on those credit card(s) for at least six months prior to your filing date - some trustees request statements and explanations going back one year. You should have a good bit of money if you stop paying all your credit cards prior to filing since you are not making those payments so now is the time to start doing that and learning to live off cash because there is no safety net in a Chapter 13 if you cannot learn to budget. When we stopped paying our cards and car payments two months prior to filing I was shocked to see how much money we had and were throwing out the door each month on bills. Reality hits hard and Chapter 13 is the best budget teacher in the world.

[newbie2]

Question: we have one credit card that has about $1000 in it and we have had our microwave get burned on a stormy night the cost to replace it is about $230 and my kids have no winter coats can we use our credit card to buy that I don’t think it would be more then $500... I have read where it would be considered fraud if you buy anything within 90 days of filing for BK that’s considered luxury... We haven’t used our cc in about a year because we were extremely short on MONEY

Thanks

You are at the perfect crossroads in your life in which you can learn life long lessons that will help you and your family. My 2 cents (adjusted for inflation :-) : You can live without a microwave. You can also explore re-sale shops for coats and clothing for your children.

I know this isn't what you wanted to hear, but it is what you need to hear. Change your mindset and you'll get through the Chapter 13 just fine! Good luck to you.

[despritfreya]

I agree with all of the above responses. I must add one comment as it relates to the following:

"I’m really upset because these banks prefer to screw everyone over instead of HELPING now my husband credit is ruined because we have to save our home grrrrr....."

I preface this by reminding you that I am very sympathetic to the plight of a debtor as I solely represent debtors.

Consumers need to understand that the lender does not have to work with the borrower.

You signed a contract that said you would pay "x"/month and if you didn't the lender would be free to take back the collateral (its property). You breached the agreement (for whatever reason including any reason that was beyond your control). Why do you think the lender has to work with you? Why do you think you are being screwed? You are the one that broke your promise to pay. The point of fact is a lender does not have to agree to anything other than what the contract you signed provides for. Please get over it. If you want to keep the home (which does not belong to you until the lender is paid in full per the terms of the loan you took out), either bring the payments current or do the bk and "cure and maintain", but don't blame the lender. It had nothing to do with your inability to make payments.

Des.