Chapter 13 New Filing Monthly Payments Question

[bn7]

Hello! I have recently filed for ch. 13. I have about 96k in unsecured credit card debt, two mortgages: 1st mtg bal = 389k, 2nd mtg bal (HELOC) = 72k. My property appraised for 330k so I am aiming to get a lien strip accomplished. I am awaiting the first creditor meeting and my attorney has filed my case and has given me a monthly payment of 355.00 dollars for 36 months, after working out my expenses and coming up with my my disposable income amount. Is there a chance the trustee will raise my monthly payments when my case is confirmed? by how much? both mortgages are current and so were the credit cards HOWEVER it was getting really hard to keep up with both the HELOC and credit cards and all I was doing were min. pymnts. There is NO way I would have ever gotten out of my cc debt / HELOC so I chose to file for ch. 13. I have NO assets of value, no car, no jewelry, no collectible items, heck no furniture or any expensive things AT ALL. My biggest fear is that the trustee will possibly triple and even quadruple my monthly payments. Can someone reply to my question?

[greenthinker]

If your attorney is competent, and was thorough in calculating your disposable monthly income (DMI), then you shouldn't have anything to worry about. If it goes up at all, I would think it would be only slightly...certainly not triple or quadruple!

I can commiserate with you about the huge CC debt and being underwater on your home...as many people here can, no doubt. You did the right thing by filing!

[bn7]

greenthinker,

WOW it's funny you say this because when I asked my attorney whether or not the trustee might raise the monthly payments he said the same exact thing! my attorney has been doing this since 1982 and dedicates his services STRICTLY to bankruptcy, we shall see! I will keep this thread updated as my case progresses.

[Pandora]

With a house @ $380K - how is it you qualified for 36 months vs. 60? Are you under median? Generally if over median you must commit for 60 months -or at least thats my understanding.

As to the trustee raising payment, yes..they can and often do. Our "projected payment" initially was around $425 ...however that changed to $600 - and there are many others on here that have endured the same.

[kornellred]

The trustee will not increase your plan payment after confirmation. Your Chapter 13 plan might include step increases during the duration of the plan for things such as auto or 401K loans finishing up during the plan, or the trustee requires submission of income data on a yearly basis whereby large income increases can trigger a petition for an increase in plan payments to the BK court. Otherwise, once your plan is confirmed, the payment stays at what is was at confirmation.

[bn7]

Pandora,

I qualified for 36 months because I am under the median and you are correct if you are over the median you MUST commit for more than 36 months, I happened to just make it under median according to my attorney. I am hoping my payments do not go up by much.

Kornellred,

I have NO 401K at all, as I stated before I have nothing of value (collectibles, jewelry etc.) what little I have are "hand-me downs", which I am assuming has helped. I do understand that I have to disclose my yearly income but I do not foresee any substantial increases not for the next 3 years at least, so this should help too. My hearing is coming up and I will post an update by then! Thank you ALL for reading my post and responding. A difficult time this has been and these replies have made it all a bit easier for me to swallow the whole process.

For anyone considering bankruptcy: if you're drowning in debt, for whatever reason and you have to use your credit cards to get by "monthly" DON'T waste any more time and see a bankruptcy lawyer to explore what your options are! I had no choice but to incur all this debt due to my previous financial situation, I even took out a HELOC! I'm back on my feet now but I incurred all this debt in the interim and filed for chapter 13. I can honestly say that it felt like a HUGE weight was lifted off my shoulders the minute my attorney told me to STOP paying my credit cards! If you're struggling month to month because you are drowning in debt consider your options (debt settlement, debt management program etc.) and if nothing else works for you, consider bankruptcy!

[seanp951]

how long did you stop paying the credit cards for?

i'm considering a 13, but haven't retained a lawyer yet... and am wondering if I should get the attorney first, then stop paying... or stop paying now.. and get the lawyer as I approach the 6 month mark??

[bn7]

seanp951,

My attorney advised me to stop paying the credit cards as soon as we signed the retainer. It was about three months between the time we signed the retainer and I paid the attorney fees in full, at which point my case was filed and the "automatic stay" came into effect right away. So to answer your question it was about 3 months in which none of my credit cards were paid anymore. There are people however that retain an attorney after already being late and/or not having made any payments to their credit cards, from what my attorney commented.

Keep in mind though that after 3 months of not paying anything to your credit cards your account will be delinquent (from what i understand) and creditors can start making attempts to garnish your check. In my case, I had already filed for ch. 13 by the time my third month of not making payments to the creditors came and because my case was already filed creditors couldn't make any wage garnishments against me anymore.

I say if you're thinking about filing, STOP THINKING and move NOW! call a local attorney and DO shop around for a good attorney, almost all attorneys offer free consultations to give you an idea of where you stand! DO some research online on your potential attorneys get names addresses etc.

I hope this helps!

[mountanddo]

I am curious as to how you purchased a 389k house and got a second mortgage with your income being under the median or did that just happen? I guess I'm a single person so the median for me is 45k. You must have a bigger household.

[mountanddo]

seanp951,

My attorney advised me to stop paying the credit cards as soon as we signed the retainer. It was about three months between the time we signed the retainer and I paid the attorney fees in full, at which point my case was filed and the "automatic stay" came into effect right away. So to answer your question it was about 3 months in which none of my credit cards were paid anymore. There are people however that retain an attorney after already being late and/or not having made any payments to their credit cards, from what my attorney commented.

Keep in mind though that after 3 months of not paying anything to your credit cards your account will be delinquent (from what i understand) and creditors can start making attempts to garnish your check. In my case, I had already filed for ch. 13 by the time my third month of not making payments to the creditors came and because my case was already filed creditors couldn't make any wage garnishments against me anymore.

I say if you're thinking about filing, STOP THINKING and move NOW! call a local attorney and DO shop around for a good attorney, almost all attorneys offer free consultations to give you an idea of where you stand! DO some research online on your potential attorneys get names addresses etc.

I hope this helps!

I went a year before I received a summons and possible garnishment. 3 months sounds very quick to get a garnishment attached to your wages but I'm not knowledgeable about that. All I know is that if that is true, I'm glad I didn't realize it!

[bn7]

mountanddo,

I do have a bigger household and was able to obtain the HELOC back when the property market was blooming and the equity on our home sky-rocketted, the timing was perfect because that's when I encountered my financial hardship and was able to get by at the time once my HELOC was approved. Thanks for clarifying the garnishment issues from creditors too.