Questions about Chapter 13

[help4mydebts]

A friend of mine who is currently in a Chapter 13 just told me that an easy way to figure out how much the repayment plan would be is by calculating your vehicle payments. She has no children or dependents, so I'm hoping this may be why hers is that high?? Is that true? I am hoping not! LOL! Thanks!

[LadyInTheRed]

A friend of mine who is currently in a Chapter 13 just told me that an easy way to figure out how much the repayment plan would be is by calculating your vehicle payments. She has no children or dependents, so I'm hoping this may be why hers is that high?? Is that true? I am hoping not! LOL! Thanks!

That makes no sense at all. It sounds like your friend doesn't understand how her payments were calculated. You can't guess what your payment is based on her payment. One way to get an idea is to use the Chap 7 means test calculator: http://www.legalconsumer.com/bankruptcy/means-test/ But, that will only give you an idea. The means test does not include your actual expenses in many areas, so don't rely on it. Your Chap 13 plan payment is based on your dispossible monthly income (DMI) which is your income less your necessary and reasonable expenses. If you have non-exempt assets or are in arrears on secured debt, there may be a minimum DMI that you must show in order to propose a feasible plan.

Are you sure you don't qualify for a Chap 7?

[help4mydebts]

Thanks, LadyInTheRed. I figured that, as it didn't seem right. I didn't think it could be that easy.

We don't qualify for a Chapter 7 right now because we are behind on our mortgage payment.

Lady, would you happen to know if the co debtor stay 11 USC 1301 would be valid for a non filing spouse in a community property state? We only have consumer debts. Not sure if I understand that correctly. Thanks.

[LadyInTheRed]

Yes, the co-debtor stay applies to a non-filing spouse.

Just to make sure you understand, being behind on your mortgage payment does not prevent you from filing a Chap 7. But, you do risk foreclosure if you can't either catch up on payments or work something out with the lender.

Before filing a Chap 13, make sure you you can afford your home in the long term. Chap 13 does not discharge your personal liability on a mortgage. So, if you are in a recourse state, file a Chap 13 and later decide you want to walk away from the home, you are still personally on the hook for the mortgage. If you are in a non-recourse state, then it won't matter except for the fact that defaulting on the mortgage will harm your credit rating. In a Chap 7, your personal liability for a mortgage that you don't reaffirm is discharged so you can walk away later without worrying about a deficiency judgement or the default showing up on your credit report.

[help4mydebts]

Okay, thanks. Would you happen to know whether Arizona is a recourse or nonrecourse state? Thx!

[help4mydebts]

And, the co debtor stay only applies to a Chapter 13, correct?

[LadyInTheRed]

Okay, thanks. Would you happen to know whether Arizona is a recourse or nonrecourse state? Thx!

Nope. Google the question.

And, the co debtor stay only applies to a Chapter 13, correct?

Yes.

[meetsv]

Arizona is a Non-Recourse state.

[help4mydebts]

Thank you!