Vacated House In 13?

[dontburnthep]

We are trying to file chapter 7, on 85K of secured debt to the mortgage company, and 70K in unsecured CC debt. We also have 45K in student loan debt. We pass the means test, but barely, and the administrator is questioning some of our expenses and continued our 341 for a month. Our Attorney states that at this point, we are proceeding with the 7, but I'd like to be somewhat prepared if we end up getting dismissed and have to go 13. We have vacated the home that is included in the bankruptcy, under a chapter 13 plan, would we have to "keep" the home for the duration of the plan? We do not want the home and have been unable to sell it.

[RunningMan]

You can surrender the home in a chapter 13. I have no idea if you will be dismissed from your chapter 7, that is up to the trustee and the judge in your case. I can't reassure you that you won't be making thousands of dollars in payments under a 13, you probably will. It is a repayment plan and you owe thousands of dollars to your creditors. How much you pay will be based on your ability to pay. Depending on how much disposable income you have, your payment could range from a couple of hundred dollars a month to several thousand dollars per month. Payment plans are for either 36 or 60 months which is determined by your income (above the median or not).

[dontburnthep]

I have no idea if you will be dismissed from your chapter 7, that is up to the trustee and the judge in your case. I can't reassure you that you won't be making thousands of dollars in payments under a 13, you probably will. It is a repayment plan and you owe thousands of dollars to your creditors.

Wow, you could have just not answered, since you say you have no idea. Really I was just looking for support. My mistake.

Thanks for the info on surrendering the house.

[puggymoo]

Sorry but some times its best to be up front with people. I would surrender the house and then let it go into foreclosure. this debt would be unsecured debt along with the cc . Your student loans cannot be in unsecured and should be a priority debt. If your income is low enough like you said then it would probably be 36 months. If you do make alot of money than it could be longer but priority debt is paid first. Remember that after the alotted time frame all unsecured debt is erased. I hope you get to stay with the chapter 7 best of luck.

[shark66]

I believe that the "magic number" for being pushed into Ch. 13 is a monthly DMI of $182.50 or above if memory serves me right.

The main thing here is that you'd be giving all of your DMI to Trustee in a Ch. 13, be it for 3 or 5 years. If you were almost making it (and I hope you still do) for Ch. 7, your monthly payments are unlikely to be high.

Thirdly, if your Ch. 7 gets dismissed, no one can force you into filing a Ch. 13. You could take time off and do some math and regroup, so to speak...

Good luck.

[dontburnthep]

Up front is helpful, rude isn't. He could have said what he was trying to say in a much different way.

We are above median but pass the means test. I would be perfectly fine with a 13 if the court determines that we can afford to pay into it- I am just very scared of what that number might be. We have aging vehicles, young children, no savings etc. It's good to know that if we're borderline, the payment may not be so high. <$400 would not be a problem, because the SL payments are $400 so we would essentially stop paying those directly and pay them through the plan and come out even. (Which after typing that out makes me think we're going to end up 13 on that point alone.)

It's the vacated house that I was most worried about- would it simply exist in limbo until a 13 was closed. Thanks for the info on that debt becoming unsecured. That clears it up for me.

When you say that no one can force us into a 13, what happens when the 7 stay is lifted once it's dismissed? In a 13, you can retain assets, correct? So could we try and save a little before we filed 13? We are living paycheck to paycheck with no savings right now.

Thanks for the help. 13 is a whole new frontier to me. Scared.

[RunningMan]

Um, rude is snapping at someone that was trying to give you helpful advice. But don't worry, I am not going to waste anymore time with you.

[puggymoo]

Have you been served papers on foreclosure? If so then that is okay. Make sure when you file that you surrender the house in bankruptcy. They still have to go through the legal process and let it go to auction. Chances are they won't come after you unless you have a second. Even then they can only be listed as unsecured and any unsecured claim MUST file a "proof of claim" to get any money at all.

[dontburnthep]

Um, rude is snapping at someone that was trying to give you helpful advice. But don't worry, I am not going to waste anymore time with you.

"I have no idea if you will be dismissed from your chapter 7, I can't reassure you that you won't be making thousands of dollars in payments under a 13, you probably will."

Is not helpful advice, you plainly say you have no idea. So just say nothing. It's easy. The rest of your post was helpful and I thanked you for it. Not wasting anymore time on me is cool.

[dontburnthep]

Have you been served papers on foreclosure? If so then that is okay. Make sure when you file that you surrender the house in bankruptcy. They still have to go through the legal process and let it go to auction. Chances are they won't come after you unless you have a second. Even then they can only be listed as unsecured and any unsecured claim MUST file a "proof of claim" to get any money at all.

No, we haven't been served yet because we filed 7 only 30 days after we stopped paying. We did surrender the house in the 7 and will be sure to do the same if we end up in a 13. We do not have a second. THanks so much, I'm feeling much better about the house issue, I was worried we'd be stuck keeping it. It was the main cause of our financial trouble so vacating was the only reasonable option. Thanks again.