Trustee wants to dismiss our case

[Forza42]

We live in AZ. We got a letter saying that we were 4 months behind on payment and have never submitted our tax refund from 2012. I have proof that we have been paying (automatic debit) and proof we sent the refund. I'm pretty sure why they say we are behind. In August we got a letter saying they wanted us to pay $300 more per month. There's no way on earth we could afford that. We are a family of 6. After all the bills are paid, we have $600 for food. We've had to take money out of our IRA numerous times just to live off of, I don't see how we could afford another $300/month. So I thought the trustee would adjust our payments to take out the extra $300, but it never happened. So this must be where they are saying we are delinquent. My question is, what if they really do make us pay the extra $300/month to stay in this ch. 13? What happens when you can't afford the payment? The only reason we did a 13 was to get rid of a $100,000 HELOC. That acct shows a zero balance on my bank account so I guess that's been taken care of? But if we convert to a 7, that HELOC will still be $100,000, correct?

I also have an e-mail from trustee saying they received our refund. It scares me that they are so unorganized. Thanks for any advice you can give!

[LadyInTheRed]

If you can't afford a plan payment, you have to modify your plan, convert to a Chap 7 or let the case be dismissed. If you convert to a Chap 7, your personal liability for the mortgage will be discharged, but the lien will remain.

You need to talk to your attorney right away.

[justbroke]

Yes, please speak with your attorney. You should never need to borrow from retirement funds -- steal from your future -- to pay for a current Chapter 13. The only way a Chapter 13 (plan) payment could be punitive is if you are trying to protect property that you otherwise cannot afford. If you had or ever have a change in income, always immediately contact your Chapter 13 attorney and seek advice. There are many things that can be done if you immediately contact your attorney and utilize one of several tools to deal with temporary shortfalls, and ways to even deal with permanent changes in income.

You should never live on $600/month for food for a family of 6. That tells me that there is something wrong with the budget, that your income has changed, or that you have new monthly budget obligations not contemplated by the plan.

As LITR mentioned, the lien strip will not stick if your Chapter 13 is dismissed (in Florida, Georgia and Alabama, we can strip in a Chapter 7). You would need to think about what a Chapter 7 would mean overall, but you need to talk care of your family and not worry about your next meal.

A Chapter 13 absolutely is never meant to be punitive in this way.

[despritfreya]

Hold on folks. I hate to say this but it sounds like Forza42 does not have an attny. I say this because it appears he/she believes that since the 2nd mortgage lender internally is reporting the account at $0.00 the lien is gone.

Forza42, if you did not either file a Motion to strip the lien or a Complaint and obtain a separate court order regarding the same, the lien will not be removed upon completion of the Plan. Alternatively there may be a provision in your Order Confirming the Plan that provides for the lien strip but such is a rare duck in AZ. What does the Order Confirming the Plan say (assuming the Plan has been Confirmed)?

Forza42, do you have an attny? If not, you may want to utilize the bk court's self help center. If you filed in the Phoenix area it is located on the 6th floor of the court. If you filed outside the Phoenix area please call the court for the location.

As to the Motion to Dismiss, you probably need to modify your Plan and incorporate a waiver of payments to cover the delinquency. You really need the assistance of counsel for this as there is no way for us to advise what the modified plan should cover.

Des.

[Forza42]

We have an attorney. We got the letter last night and haven't had a chance to talk to them.

The only "property" we have that I can think of (besides our home) is a timeshare based on points. We don't actually own a week somewhere, we own points to use on resorts. We spent $400 trying to sell that timeshare and the attorney and trustee both know this, but I wouldn't be surprised if this is the problem and they never said anything about it. We will be meeting with out attorney soon. Thanks so much for your help