Our Dilemma

[Sammie]

I touched on this a bit a couple of months ago and since our financial situation seems to be going downhill fast.

I have not contacted our Attorney because I just don't know what to tell him. As stated before we have 3 Mortgages on our home (which our Attorney knew when we filed) & told us that we were over the means test, therefore not able to file for Ch. 7. Our 2nd & 3rd Mtges. combined are below the amt. of our first, so he said we could not do a lien strip. We are not underwater.

Now this is the mess. My husband receives 2 paychecks a month. Our Mortgages come out of one and all other expenses out of the other. I have a very small SS check, which I buy food and incidentals.

I had a health scare last month and was in the Hospital for 3 days, now the Medical bills are starting to come in. And on top of this I called the hospital and asked why Medicare didn't pay anything & was told b/c I was in "observation" for 3 days. I told them that I had tests and PT and Dr.'s visits & It should be coded as "diagnostics", which she replied that she agreed by the Dr. said the code would stay and therefore we have to pay the bill as written.

I mentioned this before, my husband works for a major HI company and was told that he has reached his cap and no matter how many more yrs. he works there he will NOT be getting an increase in pay. We also relied on his Commissions & they gave the employees a 3 day notice that they would be taken away. This was a decrease in his yearly salary by -$12,000.

After our BK is completed I calculate that we will have approximately $120 disposable income. Getting a second job is not an option because his hrs. are varied weekly. The money I had been putting away in "case" is being used for daily expenses. We are current on everything.

I have to say I am at my wits end right now because although the end of Bk. is on the horizon there just doesn't seem silver lining in front of it.

Thank you for letting me vent. I hope you all have a nice weekend. sammie

Thank you for letting me vent

[LadyInTheRed]

Sammie, I hope you are feeling better.

I was wondering why you are in a Chap 13 and went back to this thread: http://www.bkforum.com/showthread.ph...-3-rd-Mortgage

I still don't understand why you are in a Chap 13. If you are in a 36 month plan either your income was under median or your plan pays 100% of unsecured claims in 36 months. You had no mortgage arrears or tax debt when you filed that would cause you to file a Chap 13. Can you shed some light on this?

In any case, with a $12,000 decrease in income and increased medical expenses, you should be able to modify your plan or, if you are under median and there is no good reason to be in a Chap 13, convert to a 7. Have you talked to your attorney since April?

[Sammie]

LITR as always thank you for your advice. Our plan pays 100% of the unsecured claims (25 months to go). We were not in arrears in anything. We wanted to do the "right" thing. I think that our pride got in the way, we should have stopped paying and put that money away. Our Attorney told us that it was to our benefit to be in a 13we didn't even ask him why?. I have not called him in awhile, but I will do this on Monday. Can you explain to me the benefit we would have converting to a 7. I know that I should be more knowledgeable, but I have just felt like the bubble is ready to burst and my energy is zapped.

Thank you I am feeling much better, it is nice of you to ask.sammie

[LadyInTheRed]

If you successfully convert to a 7, all of your debts will be discharged, including your mortgages, and you will be done. No more monthly payments!

As I pointed out in the other thread, mortgages are not discharged in a Chap 13. Based on the research I did of your state's laws, you may still have personal liability for your 2nd and 3rd mortgages after a Chap 13 discharged. That won't be the case if you get a Chap 7 discharge. If you get a Chap 7 discharge and later can't keep up with your mortgage payments, you can walk away without owing a penny.

If you don't qualify for a Chap 7, you should be able to reduce your plan payment based on your decreased income and increased medical expenses. You had equity in your home at the time you filed, right? How much equity did you have? Were you not able to exempt it?

Please do talk to your attorney. You really need to make sure you understand why you are in a Chap 13 and what your options are at this point. Whatever your attorney tells you, make sure you understand the reasoning for his advice. Ask questions until you understand. Don't be afraid to say "I don't understand. Could you please explain again?"

I hope you are over the idea that paying 100% to unsecured creditors is the right thing!

[AngelinaCat]

Hi Sammie: I broke your long first post in this thread, into smaller paragraphs so that it is easier to read. Ms LITR did fine, but my eyes didn't do so well.

I sympathize and wish I could offer you some concrete advice. I hear you about your DH's variable hours. I also work variable hours, PT, and I am getting grief about that from the dear Unemployment Compensation.

[Sammie]

LITR & AC thank you both. I am going to call he Attorney's office Mon. morning and make an appointment. We will have to ask a lot of questions since we are in the 13 for almost a year & It is tighter now then before. No, with the Mtges. we only had a couple of thousand dollars worth of equity.

My husband just asked a question. By converting to a 7 how many yrs. does this add to our BK & do we have to sell everything in our home?

I will come back to you after we see the Attorney or speak with him (hopefully he will not be on vacation). Once again, I really appreciate you taking the time to help us. sammie

[pamkev]

Sammie,
So sorry you are going thought this. If your asking how long a Chapter 7 stays on your credit report. I think it is 10 years. We filed a Chapter 7 and had enough exemptions to cover everything we did not have to sell anything.

It really sounds like you should have been in a Chapter 7 all along.

Please let us know how it goes Monday

Pam

[Sammie]

Thank you Pam. Now we are in 13 and have 2 more yrs. to pay. If we convert to a 7 how many years are added for payments.

[BNKRPTinNC]

Thank you Pam. Now we are in 13 and have 2 more yrs. to pay. If we convert to a 7 how many years are added for payments.

LITR answered this in her previous post, unless I am missing the point of your question.

If you successfully convert to a 7, all of your debts will be discharged, including your mortgages, and you will be done. No more monthly payments!

[AngelinaCat]

My husband just asked a question. By converting to a 7 how many yrs. does this add to our BK & do we have to sell everything in our home?

Hi Sammie's Hub: The answer is NO, nothing is added to your BK, and in fact you will be finished many years sooner than trying for a CH13.

We tried to do and plan for a CH13. But when I lost my FT job, there was no choice.

You do NOT have to sell everything in your home. In most cases, the state's exemptions cover your household goods. In some cases, you may be allowed to use Federal Exemptions, rather than your State's exemptions.

In any case, do NOT list things like, 'antique furniture'. You have OLD furniture. Price everything as though you had to sell it at a yard sale yesterday, and it DIDN'T sell and you had to really get rid of it, so you REALLY marked it down. <<<That kind of thinking is what we were told by our lawyer, and I am passing along to you...

Good wishes...

[keepsmiling]

When I have had idiotic discussions vis a vis drs/ins (such as when my hand was pouring blood on the rug at the emergency center, needing stitches, and the dr refused to code it as emergency so ins wouldn't pay)....I have made conference calls and let the morons hammer it out between them Just a thought. Don't fall into their trap. This pisses the heck out of me.
Good luck with that... worth a shot... and do follow up on that 7 thing. Hope you are feeling much better now.

[Sammie]

Tomorrow is going to be a busy telephone day for me.

BINC I appreciate your answer. I misunderstood what LITR explained to me. We do have a lot of questions to ask the Attorney, ques. that we should have been aware of when we filed last year. We also are in NC.

AC "Old furniture", very, very old furniture. We thought that someone came in and checked everything in the house and just sold it. I am going to learn this process if it kills me. Also, we figured that the 2nd & 3rd Mortgage payments would be incorporated into our payment plan.

ks I am glad that you were able to straighten out your medical issues. We are angry now that is seems the system is working for the Ins. Companies & we are going to fight this.

I will keep you all informed after the calls tomorrow.

Have a great Sunday everyone. sammie

[Pjmax]

Sammie, I'm so sorry to hear of your recent troubles. It would probably help you a lot if you read more about Chapter 7, the process, how it works, and converting to a 7, etc., so you can ask your attorney more informed questions. I know you love your attorney, but it just seems that by some of the questions you are asking, he MIGHT have dropped the ball, by not giving you enough info a year ago.

[LadyInTheRed]

Sammie, I'm so sorry to hear of your recent troubles. It would probably help you a lot if you read more about Chapter 7, the process, how it works, and converting to a 7, etc., so you can ask your attorney more informed questions. I know you love your attorney, but it just seems that by some of the questions you are asking, he MIGHT have dropped the ball, by not giving you enough info a year ago.

Yeah. You definitely should read up on how a Chap 7 works, including property exemptions. To figure out if you would have to give up any property, look at the property listed on Schedules A and B and then compare that to Schedule C. Is there anything listed on Schedules A and B that is not listed as exempt on Schedule C? If not, you won't have to give up anything. If you have any non-exempt property, you may be able to buy it back from the trustee.

[LadyInTheRed]

Sammie, median income for a family of 2 in NC is $51,812. You've had a $12,000 decrease in income and in your other thread you said your income for a family of 2 was $58,000. If your income is now $46,000, you should qualify for a Chap 7 unless there was some reason you had to file a Chap 13 that you don't understand. I suspect that with the right attorney, you may have been able to get a Chap 7 discharge in the first place. But, it's impossible to know without knowing all the facts.