My 100% plan was confirmed in December of this year. Paying 1st and 2nd mortgages outside of the plan.
HSBC (2nd mortgage) asserted there was a pre-petition arrearage of approx $600. This stemmed from $300 interest/fees from payments that were past due prior to filing. Even though my statement at time of filing stated no past due balance. It would have been due at the end of the loan term. Also, I paid my October 2012 payment after Oct 1st but within the grace period, so they claimed that as arrearage as well, and applied all of my paymentssince then to the following month. So my payment that I intended be applied to Ocotber was applied to November, etc.
Well, in January, the trustee filed a motion to dismiss due to the fact that there was a past due balance. Which my lawyer says was a definite overreaction (should have been challenged prior to confirmation). So from March until the end of April this went back and forth. With me providing all the documentation that I've made all monthly payments, etc.. But the main issue was that HFC wouldnt or couldnt accept a payment on the pre-petition balance.
I sat down with the attorney with a plan.....
Alot of my debt was from payday loans. And the majority of those didnt file claims. Since I am in a 100% plan my payment was tied to what I owed, not what I could 'afford'. So I had the idea to just put the entire 2nd mortgage in the plan. Raising my plan payment by my monthly payment for remaining part of the first 36 months, and by $75 less than the monthly payment the rest of the plan. So by paying less than my average monthly payment, I will emerge from bankruptcy with no 2nd mortgage (If I continued paying the monthly payment myself until maturity - I would have had 2 1-2 years remaining - with a payment for all the accrued interest/fees due at the end).
In addition, we had initially assumed that my house was worth more than it was. The appraisal came in at lower than expected and shows that I am slightly under water. This was largely irrelevant since Im in a 100% plan and a lien strip would only serve to move them fom secured to unsecured - still getting 100%. But, now if we could successfully lien strip - we would stop the interest. That is a fact that I would have thought my attorney should have caught earlier..but to stop the interest would just get me out of this a little earlier. We may also be able to get it in the plan at the till rate of 5% without going through the time and additional fees of trying to strip the lien - since it would probably result in a fight since it isnt a slam dunk.
In the past I always owed taxes. Had a personal buisness that always caused me to owe. Just checked withholdings and realized we are paying entirely too much to Fed. And since they are owed back taxes, I dont want to overpay them, as I will not see refunds. So adjusting my withholdings, I am basically getting a $400 month raise and finally feel like I can breathe again and see some light on this long road ahead.
I am in a step up plan after 36 months due to decreased child care expenses once kids get out of all day daycare..but will likely put in for level payments or decrease the step early next year. But, now I have some flexibility..and finally feel better with the motion to dismiss behind usand everything else.
HSBC (2nd mortgage) asserted there was a pre-petition arrearage of approx $600. This stemmed from $300 interest/fees from payments that were past due prior to filing. Even though my statement at time of filing stated no past due balance. It would have been due at the end of the loan term. Also, I paid my October 2012 payment after Oct 1st but within the grace period, so they claimed that as arrearage as well, and applied all of my paymentssince then to the following month. So my payment that I intended be applied to Ocotber was applied to November, etc.
Well, in January, the trustee filed a motion to dismiss due to the fact that there was a past due balance. Which my lawyer says was a definite overreaction (should have been challenged prior to confirmation). So from March until the end of April this went back and forth. With me providing all the documentation that I've made all monthly payments, etc.. But the main issue was that HFC wouldnt or couldnt accept a payment on the pre-petition balance.
I sat down with the attorney with a plan.....
Alot of my debt was from payday loans. And the majority of those didnt file claims. Since I am in a 100% plan my payment was tied to what I owed, not what I could 'afford'. So I had the idea to just put the entire 2nd mortgage in the plan. Raising my plan payment by my monthly payment for remaining part of the first 36 months, and by $75 less than the monthly payment the rest of the plan. So by paying less than my average monthly payment, I will emerge from bankruptcy with no 2nd mortgage (If I continued paying the monthly payment myself until maturity - I would have had 2 1-2 years remaining - with a payment for all the accrued interest/fees due at the end).
In addition, we had initially assumed that my house was worth more than it was. The appraisal came in at lower than expected and shows that I am slightly under water. This was largely irrelevant since Im in a 100% plan and a lien strip would only serve to move them fom secured to unsecured - still getting 100%. But, now if we could successfully lien strip - we would stop the interest. That is a fact that I would have thought my attorney should have caught earlier..but to stop the interest would just get me out of this a little earlier. We may also be able to get it in the plan at the till rate of 5% without going through the time and additional fees of trying to strip the lien - since it would probably result in a fight since it isnt a slam dunk.
In the past I always owed taxes. Had a personal buisness that always caused me to owe. Just checked withholdings and realized we are paying entirely too much to Fed. And since they are owed back taxes, I dont want to overpay them, as I will not see refunds. So adjusting my withholdings, I am basically getting a $400 month raise and finally feel like I can breathe again and see some light on this long road ahead.
I am in a step up plan after 36 months due to decreased child care expenses once kids get out of all day daycare..but will likely put in for level payments or decrease the step early next year. But, now I have some flexibility..and finally feel better with the motion to dismiss behind usand everything else.
Bankruptcy Wizard
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