Mortgage Implications

[LostOne0069]

Your vehicle exemption limit is $1200, right??

Yes, $1200 exemption.


The Trustee could offer to settle with you on the car. You pay the Trustee maybe half, like $1K, and you get to keep the car. Trustees will take payments for up to a year, interest free.

The Trustee will offer to settle, but from what I understand they don't take payments in SC.

Did you Consult with more than one attny?? Just curious??

I consulted with three, one was horrible, he told me that if I was in a 13 and ever came into money I could just pay the 13 off early w/o paying ALL of the debt. The other two, the one I'm seeing now and the other were pretty much even and they all told me the same thing.

I'm sorry, but this just seems strange... you're worried about losing $1k-$2k in equity in your car and so you would rather pay payments to a bk for 3-5 years, not be able to borrow ANY money during that time without the approval of the trustee... any time you get a raise, the payments you pay to the trustee go up... you sell the house and get a smaller one with lower payments... trustee payments go up.

Obviously I don't know your whole life story, but from what you've said on here it seems a no brainer that you should be doing a chapter 7. You might have just gotten 3 attorneys who don't care about their client. I mean, think about this for a second... at the minimum, 36months X $100/month is $3600... why are you doing this rather than lose $1k-$2k on a car that you could turn around and replace for less than your bk payments?

Remember, on the car, if the trustee decides to take it and sell it, YOU get your $1200 first... THEN the trustee gets his cut... so if he only sells it for $1500... he only gets $ 300 and you get $1200 cash for down payment on a different vehicle.

[SinkingFast]

Very good point, Lost.

The Trustee MUST pay you your exemption amount on property siezed and sold before any one else gets paid. Including the Trustee or the Trustee's costs to sell.

So even if you do go Ch 7 and turn over the car, the Trustee has to pay you $1200 right off the top. Will your car bring, in quick sale, what you owe plus $1200?? That's the question. And the Trustee most certainly knows the answer.

If your vehicle is older, higher mileage, your chances of keeping your car are very good.

Are there any repairs needed that you can document to ding the value of the car?? We took one vehicle totally out of the picture with an estimate to repair rust damage to the floor board.

There are other ways around this. Be creative!!

The attnys are telling you what they hear you want from them. You want to save your car and Ch 13 is the guaranteed way to accomplish that.

Momma always said, "There's more than one way to skin a cat!"

[nervousSC]

OK...here's my whole life story.....as it pertains to debt.

I am a single mom (no child support), live in SC (only 2 years now), and I don't know people that I could borrow money from. I make 39K Gross per year at my day job and for my independent contracting I bring home approx $288 per month Gross.

I had some pretty high credit card bills up to my knees...I actually realized it was more than I could handle around September of last year. I went to Consumer Credit Counseling in October and they set my payments at 382 per month...unfortunately, paperwork wasn't faxed or mailed to appropriate addresses and by January 2006 NONE of the creditors claim to have received the proposal from CCC....yet I'm still paying, late fees, interest rates are accruing. CCC says it's not their fault CC companies say it's not their fault, so I was just stuck. By this time the Bank of America CC had risen to over 11,000. So I decided I needed to explore bankruptcy. (I haven't used any cards since December - that was a World Market card, balance of like 300, other than that they haven't been used since August 2005.

My total debt is around 25-30K. Including property taxes. In April I had some expenses and basically had to rob peter to pay paul. I took a cash advance and while I paid it back it still left me short $$ to pay my April mortgage. In any case I've paid April (late....but within 30 days) and I'm going to be short May. Now I can feasibly catch up, however doing this would push my date to File a 7 to the end of October (to save 2K for Ch 7 fees)....and quite frankly I'm afraid Bank of America or one of the other CCs will try to sue. I got the "final" property tax statement saying they will put my house for sale on 12/2/06 if I don't pay them and I can't put property taxes in a Ch 7, plus I have to worry about my car. So all of this leaves me with a Chapter 13, which not paying my mortgage and putting it into the BK would allow me to file a 13 on June 30.......

[SinkingFast]

That clears up a lot!

You are between a rock and a hard place for sure.

And you have been thru the wringer already with the DMP and payments not getting to the Creditors.

I remember missing a car payment once, years ago. Don't know how I forgot to pay it, but I did. It took 4 months playing catch-up, robbing Peter to pay Paul, to get squared back around again. And the car payment was only a couple hundred bucks. First late on the mortgage, but not late enough to get reported, to pay the car payment. Then late on this, that, the other, but not late enough to get reported on anything, until everything finally got caught back up again.

You are right. Ch 7 won't do a thing for your tax issues. If it's gonna take you so long to save up for the attny's fee, then your house is at risk anyway from delinquent taxes. Unless you can work out a payment plan with the Tax Assessor's office, which I wouldn't hold my breathe about.

I know all too well how hard it can be to come up with the attny's fee. We just did it ourselves. So I completely understand where you're coming from.

I don't blame you at all for seriously considering going Ch 13. You can put the delinquent taxes in your plan payments as Priority Debt. And you're under the protection of the stay. Poof! House is protected. So if that's what you gotta do, that's what you gotta do. And if you need a couple house payments to pay the attny's fee, then that's what you gotta do too.

Like Aa said earlier, tho, you need to be sure that your Secured Debt, and your Priority Debt obligations will be met within the time frame you're hoping for. You don't want any surprises, like a 5 year plan, when you're hoping for a much shorter time period.

You have to add a couple months house payments on top of the $5600 you mentioned earlier, plus the remainder of your attny's fee, and the Trustee's plan administration fee as well. If for example, your house payment arrears equal $2K and you're Trustee's fee runs about $75/mo, plus the remainder of your attny's fee in the plan, your 13 plan payments will easily be in excess of $300/mo for a 3 year pay back time frame.

[nervousSC]

About secured debt, does this sound right....the paralegal told me that for the furniture at Rooms To Go they won't actually get the full amount, it would be for the depreciated amount....??

[SinkingFast]

That could very well be true. Attnys tend to have experience dealing with a variety of Creditors. Yours has possibly seen this one before and knows they will accept less than the full balance owed.

[lacyloulynn]

My dad was diagnosed with brain cancer, so he was out of work for a while. Since we didn't have very much money coming in, we missed some mortgage payments. My mom talked to the mortgage company, and they said they would just tack it on to the end. Well, a few months later, they said we had to pay it all, and it showed up on the credit report that we missed payments. We were trying to get a loan to pay out the other debts we had, and we couldn't get the loan because of that.