I've done lots of searching this forum and others and Chapter 13 is sounding more and more like it makes sense for me, but I guess I'm more nervous than anything about it. Never needed a lawyer or been to court or anything like that.
Bought my condo in California at the end of '04 for $406k with 0% down. 1st mortgage was $325k and 2nd was $81k. The balances are currently $325k and $75k. A condo with the same floor plan just sold in my complex for $270k and tax assessor says mine is worth $267k so I'm figuring comps are in the $260k-270k range. I'm single and when I bought, I was was making a bit over $100k annually. Last year the company I worked for shut down and I got laid off. I had eight months notice, so that gave me time to get a modification on my 1st, cut my expenses drastically, and save a bit of $$$. I have since been trying to get a modification on my 2nd with BofA and they just will not budge. They come up with every reason they can to deny me. The interest rate on that 2nd is 9%, I'd settle for just a reduced interest rate a few years, but they're not going for it.
When I got laid off, I was offered an opportunity to go back to school and have the government pay for it and unemployment is extended for the duration that I'm in school. Only problem is unemployment is $1,900/mo and my expenses are about $2,700/mo. And thats nothing fancy, 1st and 2nd mortgage, HOA dues and bills around the house are about $2,200, the rest is just basically gas, food, car insurance and an occasional haircut or something.
The plan is to be in school through May '12. I can't just go and get a part time job or something because anything I make would be deducted dollar for dollar from unemployment, so I wouldn't get ahead that way. But by that time, my savings will be all eaten up at this rate. I have no unsecured debt, I do have credit cards with limits of about $50k total, but I just use those for grocery shopping - mainly for the rewards - and pay them off monthly.
I talked to a lawyer today and he said it most likely can be done to strip the 2nd and pay 3% for 60 months, but its a bit unusual since I have no other debt. If I cut back a little more and get rid of 'luxuries' like DirecTV, I can get my finances down to the point that I can pay that 3% and just about break even monthly
I don't have anything fancy, a house of furniture, basic clothes, some tools to work on the home and cars with, couple of older computers, but nothing thats worth a whole lot. I like to tinker with cars and I have 3, but they're all paid off, older and high mileage over 150k miles and combined they're worth about $16k. I have credit scores of 804, 811, and 832. If I do BK, it will obviously kill my credit and I'll have to rebuild AGAIN, but I'll most likely be able to keep my home. And I should be all set so I won't be buying another home or car for a while, so it really won't matter.
Does it sound like Chapter 13 may make sense for me? And if I do so, as long as my 3 cars are under the protected amount, will that be a concern at all? I realize 3 sounds like a lot for a single guy, but they're all kind of beaters/project cars. Also, if I do so, when I go back to work next year, am I thinking right that during the 60 months that I am paying the trustee, I would want to limit my take home pay to about what it is now $1,900/mo because anything above that would go to the trustee? Anything else I should consider as I contemplate this process?
Thanks!!!
Bought my condo in California at the end of '04 for $406k with 0% down. 1st mortgage was $325k and 2nd was $81k. The balances are currently $325k and $75k. A condo with the same floor plan just sold in my complex for $270k and tax assessor says mine is worth $267k so I'm figuring comps are in the $260k-270k range. I'm single and when I bought, I was was making a bit over $100k annually. Last year the company I worked for shut down and I got laid off. I had eight months notice, so that gave me time to get a modification on my 1st, cut my expenses drastically, and save a bit of $$$. I have since been trying to get a modification on my 2nd with BofA and they just will not budge. They come up with every reason they can to deny me. The interest rate on that 2nd is 9%, I'd settle for just a reduced interest rate a few years, but they're not going for it.
When I got laid off, I was offered an opportunity to go back to school and have the government pay for it and unemployment is extended for the duration that I'm in school. Only problem is unemployment is $1,900/mo and my expenses are about $2,700/mo. And thats nothing fancy, 1st and 2nd mortgage, HOA dues and bills around the house are about $2,200, the rest is just basically gas, food, car insurance and an occasional haircut or something.
The plan is to be in school through May '12. I can't just go and get a part time job or something because anything I make would be deducted dollar for dollar from unemployment, so I wouldn't get ahead that way. But by that time, my savings will be all eaten up at this rate. I have no unsecured debt, I do have credit cards with limits of about $50k total, but I just use those for grocery shopping - mainly for the rewards - and pay them off monthly.
I talked to a lawyer today and he said it most likely can be done to strip the 2nd and pay 3% for 60 months, but its a bit unusual since I have no other debt. If I cut back a little more and get rid of 'luxuries' like DirecTV, I can get my finances down to the point that I can pay that 3% and just about break even monthly
I don't have anything fancy, a house of furniture, basic clothes, some tools to work on the home and cars with, couple of older computers, but nothing thats worth a whole lot. I like to tinker with cars and I have 3, but they're all paid off, older and high mileage over 150k miles and combined they're worth about $16k. I have credit scores of 804, 811, and 832. If I do BK, it will obviously kill my credit and I'll have to rebuild AGAIN, but I'll most likely be able to keep my home. And I should be all set so I won't be buying another home or car for a while, so it really won't matter.
Does it sound like Chapter 13 may make sense for me? And if I do so, as long as my 3 cars are under the protected amount, will that be a concern at all? I realize 3 sounds like a lot for a single guy, but they're all kind of beaters/project cars. Also, if I do so, when I go back to work next year, am I thinking right that during the 60 months that I am paying the trustee, I would want to limit my take home pay to about what it is now $1,900/mo because anything above that would go to the trustee? Anything else I should consider as I contemplate this process?
Thanks!!!
Comment