income after a 13

[KCJR]

Hello all-

Thanks to anyone that replied to my question about my sons college fund. I do have another question though. I have met with a couple of attorneys and have conflicting info that I am hoping someone can shed light on.

I am 1099 currently and am in real estate. I have nothing in contract or expected to close and will have to file a ch 13. I plan on surrendering the home as well.

As I understand it they use our total household income and look back 6 months. My wife is working and I have not made squat this year. She is not on my mortgage or anything else. So it will be based on the ( wifes) household income.

My question is : What happens if I do a ch 13 and get a payment plan and then start making money in the future? Does the payment recalculate? Do I report income after the Ch13 plan has started?

2 attorneys said no the payment does not change and another said it could?

So far non of this is fun and there is very little to be excited about.

[keepsmiling]

Why are you thinking 13? I thought you were looking at a 7.
But yes, if you have an increase in income, your payment could go up unless you are at 100% repayment.

[KCJR]

we are right at the "limit" for ch 7. If I work at all we go over the limit I have to really consider 13.

[keepsmiling]

Easy solution. Don't work
There are lots of other ways around it too.... it isn't just about your income. Your expenses count too. Don't tie yourself down for 5 years if you don't have to. ESPECIALLY if you don't want to save your house!
Are you giving yourself some kind of amount to pay for housing?
What's your equity story with the house? why are you in such a hurry to surrender?

Keep reading. You need to be better informed. Good luck and hang in there.

[KCJR]

Ha thats funny But really there is no way I can not work while my wife goes in every day. IMO that is not what you do and is just not acceptable, at least to me it isn't.
Apparently trying to do all the right things is working against me. I have paid off about 50K in credit cards in the last 4 years and just sold my Jeep to get rid of the payment. So other than a $2200 mo mortgage payment and the remaining 10K in cards it's just "living" expenses. I ran my savings down to close to zero in my eyes , but it looks like the 6k I have back for my sons college isn't really his.

Not in a hurry to surrender the house , but my income has gone from 125K in 08 to zero today. I don't have the money for the payment and the bank isn't interested in a workout or mod. Home mortgage is 280K but value is 220K to 235K. The real problem is the house. I bought it on an 80/20, if I short sell the first will be covered but the second won't get paid and they will likely sue for the balance, hence the BK.

Either way doesn't look like I can keep the house and at this point I am kind of whatever about it. I will just rent another place and save cash while reparing my credit. Thats why I asked about income after the ch 13 is confirmed , how would that change things?

[pamkev]

I think keep smiling has it right I was thinking of doing a 13 but our lawyer advised a 7 after 90 days its all over and done with and we can start rebuilding our lives as well as our savings account to start paying for things in cash. We have been doing that since we opted to go this route and it is a great feeling if we don't have the cash than we don't need it is our motto now.

Pam

[AngelinaCat]

If you don't have a steady income stream, there is no way you can fund a Ch13. My 'Hub and I were planning toward filing a Ch13, but when I lost my FT job, we had no choice but to file a Ch7. It ended up working out better for us.

Do some more reading here, especially the 'stickies' and schedule two or three more legal consults. Good luck to you.

[LadyInTheRed]

2 attorneys said no the payment does not change and another said it could?

I suspect the 3rd attorney is being more conservative than the others. You are suppose to submit all of your disposible income to the plan during the length of your plan. So, techinically, if your disposible income increases, your payment should increase. In reality, whether that happens depends on practices in your court. Some trustees require you to report all increases in income. Some trustees require that you report all increases over a certain amount. Some trustees require you to send them copies of your income tax returns every year. Based on the information you report to them, they decide whether to pursue a plan modification to increase your payment. Some trustees don't ask for any of that information in which case your income increases will probably go unnoticed and plan payment unchanged. That may be how the Chap 13 trustee in your district works. But regardless of their standard procedures, the trustee has a right to request current financial information at any time. They could change their procedures and start monitoring income increases. I think the 3rd attorney is allowing for that possibility. Just a guess.

The trustee in my district doesn't ask for any information during the plan. But, anytime I get a bonus or an increase in income (all very modest so far), I tell my attorney about it and he says "congratulations, keep making your plan payment."

But this hopefully will never apply to you. Don't get into a Chap 13 that you don't belong in! If you can qualify for a 7, don't make any moves to change that.

Ha thats funny But really there is no way I can not work while my wife goes in every day. IMO that is not what you do and is just not acceptable, at least to me it isn't.

I am sure there is plenty of work you can do at home. You could also do volunteer work. You can do valuable work without earning an income.

[Billssuck]

One thing I learned while in my ch13 is that you can only prepare your plan for the way things are now. Wait until they happen (and in your case if you can keep it from happening) to report it. During my ch13, I had three different times where I was supposed to get a promotion at work and it never panned out. I fretted over letting the trustee know but it never happened so I didn't have to worry. In our district, we have to report an increase in income of 10 percent over the amount we filed with.

[keepsmiling]

Are you still paying the cc's?
Assuming you weren't, what would your budget look like including the 2200 mortgage payment?

[KCJR]

Including the $2200 mortgage expenses are $4584 BEFORE food , fuel, entertainment. No stopped paying CC's in 08 and was setteling out on them as we saved up cash.

The real problem is my wife makes just at the median ch 7 income and I am at zero. 1 attorney says we can't go ch 7 because her income is so close and another says I can becuase of excpetions. Either way I can't see how I can do a ch 13 because of zero income.

[Pandora]

The real problem is my wife makes just at the median ch 7 income and I am at zero. 1 attorney says we can't go ch 7 because her income is so close and another says I can becuase of excpetions. Either way I can't see how I can do a ch 13 because of zero income.

Keep interviewing attorneys....find the one that is willing to go the distance and play the numbers game; you can be over median and still file Ch. 7. With that being said - you need to know how / if the Lanning decision will apply in your case, as income in a Ch. 13 can be "forward looking".

As to the house - whats the 1st amount compared to the 2nd? To strip a 2nd off, the value of the home needs to be below what is owed to the 1st mortgage. The bigger issue I would think, is if you're right at the median, ($51839 -married, $60219 family of 3) and your house payment is $2200 - then it would appear that half of your income is going towards a mortgage payment.

Remember your trustee can deny a Ch. 13 plan if it isnt feasible in the long term.

[KCJR]

Pandora- Yes I am finding that my situation is a little more complex than most. Yes the largest problem is the "household" income part. My wife and I were both burned in the past and going into the marrage we agreed that my debts were mine and hers were hers. She even kept her house .Ok fine, BUT it appears the "house hold" income part is dragging her into this mess. By calculating her income to find disposible income , well lets say she is less than pleased. Because for ease of use for on line banking on our end, her money/savings is considered mine , her gross income is at the top of the median but she has a good 401K so the take home is less. If I cant get this figured out soon, she will solve the household income problem for me.
As for my house the first is $222K and the second is $54K so I don't think the sale will be low enough to wipe the second.

This is the worst experience ever- To rich ( not my money) to go ch 7 and to broke to go ch 13. This is all very stupid.

[keepsmiling]

Others here have been in your situation. Hopefully they will chime in with their experiences.
Give us a little more info here.
The house is the wife's? Your name is not on it anywhere? Joint debts?
Income/fam size?
Too bad the "B word" scares people so much that they don't even go looking for info and find this board sometimes before they've made all those mistakes.... like paying off the cc's with secured loans, getting rid of the car, using up their 401k's etc. I remember how terrified I was to even google it :P

Sometimes the solution is as easy as just buying a car. Keep reading and posting.

[KCJR]

My wife and I had homes and debt prior to getting married the house and debt in question are in my name only. We have no joint debt. She made $60,500 last year and on that same pace this year . There are 3 of us living in my house , I had a few commissions early this year so I have been advised to wait to file. To protect against fraud we set up 5 accounts with Chase bank and we kept the savings away from the debit cards and movedmoney around as needed within the accounts. Apparently anything with my name on it makes it mine. So the money that is hers needs to be spent prior to filing. That is because of how we did our accounting.