new-getting ready to file a 13- i have a million questions

[confused1960]

Hi all,
I have contacted a lawyer and filled out the paperwork he gave me. It appears to me that I will have a lot of extra income after I quit paying on my credit cards and second mortgage. I haven't met with him yet to discuss this.
It looks like I will have about 1200 a month dmi. I only have about 35k in credit card debt and a second mortgage for 137k. I just paid to have an appraiser come to my house.....it appraised at 146k and I owe 147k on the first. so I am trying to strip my second...my lawyer says this is doable.
anyhow my question is: when my second is stripped will they get any money during the 60 month payment plan or will all the money go to my credit cards?
the reason I ask is because if only my credit cards get paid back then with a high DMI it seems to me even at 100% I would finish paying off much earlier then 60 months. but if my second mortgage also gets money then I will be stuck for the entire 60 month period.
also I have a 15 year old van and a leased chevy volt.....I went out and bought a new car today (I am current on all my bills so I still have great credit) because my lease ends in 18 months and I was afraid of not being able to get a car while in the middle of a bk.....will this cause a problem? my lawyer said I could buy a car as long as the payment was under 517 per month.
my last question is: can I let the Volt go in the bk and buy another car so I would have 2 decent cars during this process?
I am in SW FL.

[159515951]

Your 2nd will file a claim and be treated like any other unsecured creditor in your 13. They'll likely receive the same percentage of payback as your other creditors, which depends on the amount of your payment. For example, if your payment ends up being $1,000 over 60 months ($60k total) and claims are made by creditors in the amount of $172k, your percentage of payback would be around 35%.

You should be ok on the new car. Your attorney will probably ask you if you're planning to surrender the leased Volt, which would be reflected in your Plan. You would need to buy the other new car now, and then surrender the Volt. In any case, talk to your attorney just to make sure you're in the clear.

[confused1960]

Your 2nd will file a claim and be treated like any other unsecured creditor in your 13. They'll likely receive the same percentage of payback as your other creditors, which depends on the amount of your payment. For example, if your payment ends up being $1,000 over 60 months ($60k total) and claims are made by creditors in the amount of $172k, your percentage of payback would be around 35%.

You should be ok on the new car. Your attorney will probably ask you if you're planning to surrender the leased Volt, which would be reflected in your Plan. You would need to buy the other new car now, and then surrender the Volt. In any case, talk to your attorney just to make sure you're in the clear.

Thank you very much for your reply!!

Ok Next question.......I am a Realtor...my pay has wild swings....feast or famine so to speak. My wife makes 75k per year ...year in year out so she is very stable income wise. If they set my payment based on our previous 6 month average earnings and then I go months without selling a house.....can I apply to lower the amount of my payment? or would I just be out of luck?

[despritfreya]

It looks like I will have about 1200 a month dmi. I only have about 35k in credit card debt and a second mortgage for 137k. I just paid to have an appraiser come to my house.....it appraised at 146k and I owe 147k on the first. so I am trying to strip my second...my lawyer says this is doable.

While you do say you are "trying to strip" the 2nd, I hope your attny did not guarantee a lien strip. Your appraisal shows the property underwater by a mere $1k. When you go for the lien strip, if the lender files a response you can bet the lender’s appraisal will show more than $1k in value over what is owed to the first. You are not underwater far enough for this to be a slam dunk and I trust your attny is not misleading you to think it is.

when my second is stripped will they get any money during the 60 month payment plan or will all the money go to my credit cards?

To the extent you are paying your unsecured creditors, the lender will have an allowed unsecured claim and will share in the distribution.

Don’t see a problem with the new vehicle purchase. If it is a lease you will pay it directly. If it is a purchase you may have to pay it through the Plan.

If your actual future income is less than anticipated, you should be able to amend/modify your Plan to reflect the same so long as the final total to be paid under the Plan provides for what is required under law to be paid.

Des.

[confused1960]

While you do say you are "trying to strip" the 2nd, I hope your attny did not guarantee a lien strip. Your appraisal shows the property underwater by a mere $1k. When you go for the lien strip, if the lender files a response you can bet the lender’s appraisal will show more than $1k in value over what is owed to the first. You are not underwater far enough for this to be a slam dunk and I trust your attny is not misleading you to think it is.

My lawyer said that he feels reasonably confident that with a professional appraisal and the city tax collector both saying the home is under the value of the first loan he should be able to strip the second. He did not however offer any guarantees.



To the extent you are paying your unsecured creditors, the lender will have an allowed unsecured claim and will share in the distribution.

Don’t see a problem with the new vehicle purchase. If it is a lease you will pay it directly. If it is a purchase you may have to pay it through the Plan.

If your actual future income is less than anticipated, you should be able to amend/modify your Plan to reflect the same so long as the final total to be paid under the Plan provides for what is required under law to be paid.

Des.

Thanks for the reply!
Next question....I will probably have somewhere around 10k in cash in my realtor bank account...I am a PA.....although this seems like a lot of money I may not make any more money for several months...or I may make 20k next month......how does the current cash balance effect my monthly payments?

[despritfreya]

Next question....I will probably have somewhere around 10k in cash in my realtor bank account...I am a PA.....although this seems like a lot of money I may not make any more money for several months...or I may make 20k next month......how does the current cash balance effect my monthly payments?

I am assuming the "realtor bank account" is in your name - not the name of some corporation or LLC

Answer depends upon Florida exemptions, which I am not familiar with.

If the funds are not exempt, you get to keep them but have to account for their "value" to your creditors over the life of the Plan. This is called "chapter 7 reconciliation". Your unsecured creditors must receive, over the life of the Plan, what they would have received if you filed Chapter 7.

If the funds are not exempt and you had filed a 7, the 7 Trustee would have taken the money and used it to 1) line his pocket 2) line the pocket of his attny if he hired one and then 3) distribute what was left to the unsecured creditors starting with any priority creditors such as back taxes or support obligations.

Des.

[LadyInTheRed]

Never mind. Des is quicker.

[confused1960]

[QUOTE=despritfreya;598533]I am assuming the "realtor bank account" is in your name - not the name of some corporation or LLC

The account is in my name with the PA at the end of it...makes it like a corporation I think

[LadyInTheRed]

The account is in my name with the PA at the end of it...makes it like a corporation I think

Either it is a corporate account, or it's not. Putting a PA after your name suggests your business is a Professional Association. According to my quick google search, in Florida, that means your business is incorporated. Is that true? If so, you will need to place a value on your stock in your corporation. If the account is part of the corporate assets, it will be part of the value of the corporation. It is important to determine which debts are corporate debts and which are personal debts and what corporate debts you have personally guaranteed. If there is debt in the name of your corporation, you may need to file a separate BK for the corporation or shut down the corporation.

[confused1960]

Either it is a corporate account, or it's not. Putting a PA after your name suggests your business is a Professional Association. According to my quick google search, in Florida, that means your business is incorporated. Is that true? If so, you will need to place a value on your stock in your corporation. If the account is part of the corporate assets, it will be part of the value of the corporation. It is important to determine which debts are corporate debts and which are personal debts and what corporate debts you have personally guaranteed. If there is debt in the name of your corporation, you may need to file a separate BK for the corporation or shut down the corporation.

I have an ein number and I have no debts under my PA name. I just started the PA feb last year on my accountants advice.
My attorney had me fill out p&l's for my pay for the last 6 months.....the problem I had there was that I usually pay cash for everything and he said not to include expenses I couldn't back up with bank records or receipts....so things like taking a client to lunch, gas in my car etc...I normally just pay for in cash(I don't like plastic)so I didn't include any of that on my p&l's...so now I have been doing everything with my debit card.