New and would appreciate any advice. Filed Chap. 13 today.

[Chelsea123]

My husbands business has been failing and he hasn't been making the mortgage payment. We received foreclosure notice. The attorney said the best way to protect our house would be to file chap. 13. We have a lot of credit card debt as well mostly from the business and emergencies. However I have always paid my bills on time and always more than the minimum. So...this is very hard to think of not paying now. I am also very confused about what the repayment will look like. I'm worried it will be harder to make that payment then what I was doing. I also don't understand if they put the business debt and personal debt all together. I am unclear on process just found out today about 941 mtg. We have always had good credit...which of course will change now. Any advice appreciated. This has been a very difficult weekend!

[michaela]

Did you both file??? Hopefully only of you filed even if both names are on the mortgage only one has to file. The only advice would be to make your payments. I have been in a chapter 13 since 2004 had to file a few times but got a subprime mortgage (refinance with 12.5% interest) Got the good news last week CHASE modified my mortgage 3%interest rate. Everytime I refiled always made sure my husband did not so one of our credit was not totally destroyed. Good Luck

[Chelsea123]

I didn't know that was an option! So no we both filed.

[michaela]

Your attorney should have suggested that to you. Good Luck make your payments and everything will be fine.

[keepsmiling]

Hi and Welcome!
Glad you found us.
The key really is a well crafted plan that realistically allows you to make those payments.
Hopefully your lawyer is wise enough to have drawn up a plan that will allow you to be successful.
We're here to help with that by giving suggestions if necessary, and to support you through the entire process. If you want to throw some numbers at us, we might be able to help you make sense of whatever it is that's confusing you.

[keepsmiling]

ps it's a 341 meeting .... We talk about them all the time. You may be able to sit in on one if you want to see what they are about to decrease your anxiety.

[pugs]

We are in the same boat as you. Although we didn't have a personal business fail, we both had job losses/paycuts. We too were never late on bills and the first time I was I thought I was going to explode. This board has been wonderful with calming my nerves and giving great advice. I am starting to look at Chap.13 as a business decision rather than the worst thing in the world. Lots of hugs and support coming your way!!!!

[Pjmax]

I was a 7, so I don't know, but; if you filed yesterday, wasn't your plan part of that filing? You don't know what your attorney's proposed plan amount is?

[Malazan]

Pugs, Chelsea123:

I am also in the same situation, almost exactly the same as pugs. Fear and apprehension are common during this time, and you are NOT alone. This is the place that helps get you through it!!

[LadyInTheRed]

I am also very confused about what the repayment will look like. I'm worried it will be harder to make that payment then what I was doing.

This concerns me! If you signed your petition and it was filed, unless it was an emergency petition, you should know exactly what your payment is under the plan that was proposed. The payment may change before your plan is confirmed, but you should know your proposed payment and how it was determined. Your first payment probably needs to be made within 30 days. If your payment is too high, it could mean that you can't afford to keep your house.

Please look through your petition for your Chap 13 plan to see what the payment is. If this was an emergency filing to avoid a quickly appoaching foreclosure sale, there may not be a plan. If that is the case, there will be additional documents for you to sign that must be filed with the court within 14 days. Before you sign any additional paperwork, make sure you understand the process, how much your payment will be and how the payment was determined.

The best way to avoid anxiety is to be educated. It sounds to me like you are not educated on your own bankruptcy case. Please do what it takes to understand everything!

[Chelsea123]

This was an emergency filing to avoid foreclosure and we have 14 days to file the complete paperwork. Our attorney spoke to the banks attorney (for the mortgage) a few times and they said they'd be willing to have a very low payment while we try to sell the business. Of course that is not all of the debt though. The attorney was out sick yesterday so we did paperwork with the paralegal and didn't get all of my questions answered and I did not know some of the things to ask until I read more. I am trying to educate myself but I'm not sure if the all the information online helps or confuses me more.
Anyway I really appreciate the support and just knowing others are going through this. I keep thinking how wrong it feels not to pay these creditors.

[LadyInTheRed]

This was an emergency filing to avoid foreclosure and we have 14 days to file the complete paperwork. Our attorney spoke to the banks attorney (for the mortgage) a few times and they said they'd be willing to have a very low payment while we try to sell the business. Of course that is not all of the debt though.

As far as your plan payment is concerned, it is your trustee you need to worry about more than the creditors. The mortgage company will only complain if your plan doesn't cover all the arrears and provide for payment of your post-petition mortgage payments.

I keep thinking how wrong it feels not to pay these creditors.

Try to get over the guilt. The creditors aren't likely to work with you to avoid the need to file BK. I would have gone on paying minimum payments for the rest of my life if 2 banks would agree to lower my interest rates to make the payments manageable. None would. They offer credit based on assumed risk. Accepting the risk and continuing to extend credit to people who are extended beyond their means is their business decision. Refusing to work with debtors in distress is their business decision. Filing BK is your business decision.

Chelsea, when your attorney has your schedules and plan ready for your signature, make sure you have time to go through everything and have your attorney answer all of your questions. Don't sign anything until you know what your payment will be, understand how it was calculated and are confident that you can make that payment for five years.

You said you were worried that your plan payment would make things worse than before you filed. If Chap 13 is the right solution for you and your plan is well drafted, the BK should make things easier. If it doesn't, you may need to decide whether you really can afford to keep the house.

[Chelsea123]

Thank you for that perspective it helps. I wish I had never agreed to put the house as collateral on the business loan...but I also think they wouldn't get anything from forcing a house sale there's not enough equity by the time the first lien is paid.

[Chelsea123]

So who actually develops the plan? The attorney or trustee or both?

[woeisme]

So who actually develops the plan? The attorney or trustee or both?

It's usually a give and take process. The lawyer should be knowledgeable about what the trustee in your area will accept, so should draft a plan with both your best interest and knowledge of what will be allowed. Some trustees object to every plan, so the lawyer would be aware of that and craft your plan with that in mind, while other trustees won't object to a plan as long as it doesn't trigger one of their "hot button" items that they always object to. That's why choice of attorney is so important in a CH 13, it's a real negotiation rather than a simple list of rules that follow some cookie-cutter pattern. (I dislike this aspect of 13's immensely, but was lucky to have a real reasonable trustee).

Even if your trustee does object to your plan, you can go before the BK judge, who has final authority over even the trustee, and fight the issue if you think the trustee is being unreasonable, but typically it doesn't come to this. So in answer to the question, the attorney crafts the plan, hopefully one the trustee will accept or one with enough wiggle room that they can negotiate if the trustee does object, and in the end, the judge decides whether to grant the petition for the plan in the end.