Should I throw on the towel?

[Bkbcofshoes]

Hi all, I filed 2 years ago for ch13. I had a 2nd which has been dismissed and unsecured cc debit. I make 90k and was told I couldn't do ch7. I have been paying the trustee ($700) but I got behind in my mortgage which was outside of the plan (unexpected medical expenses and loss income). I was able to ALMOST catch up my taking a loan against my retirement. Mortgage company agreed that i could modify plan so now the balance owed will be redistributed in the remaining three years of the plan. I calculate that this will increase my trustee payment to $900 maybe $950 including add'l atty fees. If I had trouble paying mortgage, car and house maintenance, utilities and $700. Don't see how I can pay more. Attorney states there is nothing else that can be done unless I refile the whole bk. Didn't that that was possible. I guess that means start over meaning another 5 years which I will not do. Question, if the plan is indeed modified will I have to do all the paperwork again? If so could it be determined that I can't afford the additional $$$? Then what, default? So close but so far away. I have been thinking about a part time job. Know I'm not suppose to do that but what else can I do?

[dmc-2008]

Sorry this is so hard! I think if you have to modify you have to redo the paperwork and maybe the payment will be decreased? Does your atty want more $$$$.

[Bkbcofshoes]

Yes, my atty wants more money. He required $500 to negotiate the modification with mortgage company. Plus $$$$ for modification. I don't know how much yet but hopefully it will be paid within the plan as I requested.

[woeisme]

I was able to modify my plan from $1100/month to $400/month due to a decrease in income and change of circumstances (higher medical bills due to husband becoming disabled) so as long as you are able to pay secured debts in full I think they have to allow modifications if your disposable income that was being used to pay unsecured changes without refiling a totally new CH 13. Of course some trustees are more hard-nosed than others, and your lawyer sounds like a jerk since mine charged a flat fee at the beginning (I think it was between $2500-$3000, it's been so long I forget exact amount) but then she did the modification paperwork plus a few other things for us (late filing of a creditor, request for 3-month suspension in payments while we were getting approved for disability pay, etc) with no additional fees. Something as complicated/non-routine as a mortgage refinance, ok, I can see charging for that, but for normal CH 13 BK issues like changes in income should be part of the original contract I'd think.

[LadyInTheRed]

Question, if the plan is indeed modified will I have to do all the paperwork again? If so could it be determined that I can't afford the additional $$$? Then what, default? So close but so far away. I have been thinking about a part time job. Know I'm not suppose to do that but what else can I do?

How much paperwork you will need to do depends on local procedures. But, you won't have to file an entire new petition. If your income has been decreased, it is very unlikely your payemnt is going to increase unless you have some significant decrease in expenses.

What makes you think you can't get a part time job? If that's what you need to do to make your plan payment, do it. If it means you have so much disposible income that your plan payment would increase even more than required to cover your mortgage arrears, than you need to look at how you can reduce your expenses.

If your Chap 13 is dismissed and you don't file again, you will be back on the hook for your 2nd mortgage. If you refile, stripping the 2nd mortgage would be based on the current value of the home, which may or may not be higher than when you filed. I suggest you sit down with your attorney and discuss the pros and cons of a modification vs. dismissal and refiling. What is your current income. Could you qualify for a 7 now? Or maybe a 3 year Chap 13 so you would not be set back an entire 2 years?

Also, think hard about whether you can really afford to keep your home. If you make it to discharge, will you be able to keep the mortgage current on your current income? Will you have room in your budget to start saving for emergencies like the decrease in income and unexpected medical expenses that caused you to get behind this time? Might it be a good idea to modify the plan to give up the home instead of to catch up on mortgage payments?

and your lawyer sounds like a jerk since mine charged a flat fee at the beginning (I think it was between $2500-$3000, it's been so long I forget exact amount) but then she did the modification paperwork plus a few other things for us (late filing of a creditor, request for 3-month suspension in payments while we were getting approved for disability pay, etc) with no additional fees. Something as complicated/non-routine as a mortgage refinance, ok, I can see charging for that, but for normal CH 13 BK issues like changes in income should be part of the original contract I'd think.

An attorney is not a jerk for asking to be paid for work not included in the original fee agreement. A modification is not a simple thing. Just because your attorney includes certain services in his fee, doesn't mean another attorney should. If you hired a contractor to remodel your kitchen and half way through the job, decided you wanted him to do additional work from what was originally contracted for, would you expect him to work for free?

[woeisme]

Actually, our modification in the plan due to a documented decrease in income was an extremely simple process, took a 10-minute conversation with my lawyer on the phone, she submitted a new income/expense page. The OP's lawyer said that it wasn't even possible, has to dismiss and start BK over again, that definitely sounds like a jerk trying to get a whole new bite at the full BK fee apple to me. CH 13 lawyers supposedly charge much higher fees than CH 7 fees BECAUSE they need to service the plan for 5 years, and changes in income are very routine (as compared to the mortgage modification, that I agree is outside the normal bounds of routine CH 13 maintenance.) But I stand by my statement, when lawyers charge double to triple to file a CH 13 compared to a CH 7 because of the nature of a CH 13 having ongoing obligations on the lawyer, charging high fees for every routine obligation that comes up is a crock.

[LadyInTheRed]

Actually, our modification in the plan due to a documented decrease in income was an extremely simple process, took a 10-minute conversation with my lawyer on the phone, she submitted a new income/expense page. The OP's lawyer said that it wasn't even possible, has to dismiss and start BK over again, that definitely sounds like a jerk trying to get a whole new bite at the full BK fee apple to me. CH 13 lawyers supposedly charge much higher fees than CH 7 fees BECAUSE they need to service the plan for 5 years, and changes in income are very routine (as compared to the mortgage modification, that I agree is outside the normal bounds of routine CH 13 maintenance.) But I stand by my statement, when lawyers charge double to triple to file a CH 13 compared to a CH 7 because of the nature of a CH 13 having ongoing obligations on the lawyer, charging high fees for every routine obligation that comes up is a crock.

The OPs situation is much more complicated than a decrease in income. Mortgage payments have been missed and a new 401k loan has been taken. The way I read the post, the lawyer said there is no other option other than to modify the plan to increase the payment or dismiss and refile, not that modification is not possible.

Just getting a Chap 13 petition filed is more complicated than a Chap 7 petition. In a Chap 7, an attorney doesn't have to prepare a Chap 13 plan that is confirmable and that the client can live with for 3 to 5 years. That alone is justification for a higher fee. My point is that if a certain service is not included in the original fee agreement, then there is nothing wrong with charging for the service, regardless of what the orginal fee is. When you agree to pay a certain fee for certain services and then need additional services, you should expect to pay for the services and the services provider is right to expect to be paid. A modification is not a routine obligation. Also, even your modification may not have been so simple in another district or with another trustee. For all I know the attorney could be a jerk. But, there is nothing in this thread to prove that.