HELP! Just confirmed, huge emergency expense, options?

[NYHusband]

Hi everyone.

So we just mailed our 4th payment out of 60. Payments have been $1950/mo, however we were just confirmed according to our lawyer's assistant at $2250/mo, haven't received paperwork yet.

Well, our savings account for emergencies is at $700 after 4 months on a budget. Everything was going along ok until the pool of sewage started to form 10 feet from our septic system.

Already $400 in with a contractor for pumping and excavation without touching savings. Repair quote for a new drywell and associated work is $4300. As it will be on the other side of the driveway they need to cut a 3' wide strip out of the blacktop driveway to lay new drain pipe. Total for this repair will be at least $5000.

Now, every two weeks max the tank needs to be pumped at $175 or it overflows sewage. So as you can see, this needs to be fixed NOW.

Option 1 - The only source of money I've got other than waiting and saving is a 401k loan. Do trustees allow this for emergencies?

Option 2 - Try to move two payments to the end of the plan, and save for two months. This will waste about $700 in tank pumping to keep sewage from spilling out!

I tried to call my lawyers office - I fear they're closed for the holiday already

[LadyInTheRed]

The 401k loan should be your last choice, but you can probably do it since it is really a loan from yourself. People have posted here about being able to suspend their plan payments long enough to pay for emergency expenses. That may be an option as long as it doesn't bring your plan base too low to pay priority or secured debt and any non exempt property that are to be paid in your plan. You'll have to wait to hear from your attorney to find out what your trustee will allow. Hopefully the contractor will take payment in installments.

Sorry you are having to deal with this at all and especially so early in your plan.

[BigJohn]

Wow!

I have been there ......... like many times.

For me, it means the retieval of my trusty shovel.



I probably could put in a new septic drain field for less then $100.00 in parts and the cost of a few yard of crushed stone.


Oh, the drywall. Where is it? In the basement?

[justbroke]

I had almost the same exact problem! I had sewer backup about 4 months after filing! It was a cracked sewer line and the repair required them to excavate my concrete driveway (3' x 3'). Fortunately, I was able to use savings... but that certainly changed my entire outlook so quickly into the process.

You will need to speak with your attorney and tell them what happened. You may be able to defer "some" payments, but if your payment is mostly "secured" debt payments, this can get very tricky.

As Lady wrote, the 401(k) loan could be a good last resort, but you have to weigh the payments factored in with your current expenses. You will not be able to modify your plan to account for this new loan repayment (since it would be post-petition). If you do get a 401(k) loan, make sure you speak with your plan administrator FIRST! You may be able to do this on the longer 30-year payback since it is related to your home -- I don't recommend the 30-year payback, but it would give you breathing room.