Incuring new debt before approved!! (long post)

[IZBROKE]

Hi, I had to create a new registration on this site because it did not email me a reset on my password. So new name but not a new member.

Here is a the situation my wife and I have----We are panicked about this 13 and changes we have made!!
We have been renting a mobile home here in Florida for the last 2 years with no problems. We just learned at the last second that they are not renewing our lease. We panicked and looked for another place that would rent to us even though we are in our second year of a 5 year chapter 13. We found some apartments in a very bad area that would rent to us but they were $300 more than our current lease.

Desperate and fearful we talked to a reputable guy who sells mobile homes and found a decent one for $19,900 + lot rent. Here is probably the mistaken decision we made when we were about ready to not have a roof over our head.
We incurred debt without asking the trustee!!!!!!!
My dad said he would gift or loan us $10K whichever works better for chapter 13 trustee for a down payment. We put a deposit ($1000) on the home. And the rest of the amount ($8900) the guy selling the mobile home would take small payments ($100-? whatever we can afford) with no interest.

We take responsibility for this but not prepared to lose our chapter 13...
I did email my lawyer 3 times and he finally emailed me Friday saying "technically we are not to incur any debt without approval and that he would need to file with the trustee for us to incur debt." I said lets do this right away and told him in a panic we did the deal.
In the earlier emails I asked many questions but he only answered one.

With the new mobile home we will be saving about $400 a month and with this happening so fast I thought it was a no brainer. We needed a place to live...
We did not handle this correctly at all.
We are in the middle Florida district.

This is the same lawyer who really talks down to us----He really got pissed off that I was looking on pacer. That time he treated my wife and I like children. I fear talking to him due to his aggressive demeanor. I don't react well with disrespect...( I have kept my mouth shut. Normally I would act out on this--I know---Crazy guy ) I don't like him at all but we have been through this for a year so far. I have many other issues on import questions in the past that are still not answered. Anyway----I really didn't want to share that but wanted to share what we have been through.
Our payment to the trustee is around $100. I am disabled and have a social security disability hearing next month and my wife works full time. Of course we don't live to well with all of this but we signed up for the chapter 13 and NEED to finish it!!

I can't sleep at night with all this fear.
What are the possibilities of getting approved to incur this debt even though we have already purchased this mobile home??
What happens if we are denied to incur new debt even though it has been incurred out of necessity??

I am sorry about the long post---just wanted to show the whole picture of our fearful and desperate situation
Thanks
IZ

[dmc-2008]

I hope you atty can do a modification and work with the trustee. Then maybe you can just have a higher payment now and they will be happy? Idk but i wish you well!!!

[IZBROKE]

Just some new news from lawyer. (maybe he does listen)
He has called the trustee to see if we can bypass the hearing and just get it done.
I am not sure if he can do that but pray he can!!
IZ

[PANSYFACE]

Prayers going up !!

[justbroke]

Trustees are not out to make a Chapter 13 debtor's life miserable despite many anecdotal evidence of a few that find the "aggressive" Trustee. The Chapter 13 Trustee does not make money, unless you are successful! They want you to succeed and they just want you to do things by the book... err... Order Confirming Chapter 13 Plan.

You may not need to modify your confirmed plan if nothing really changes, but you'll need to wait for the Trustee's response. Just hang in there. Some Districts/Trustees allow you to incur debt if it doesn't affect the current plan. In any case, even if the Trustee rejects the request that you make to them, you follow up with a Motion to Incur Debt to override the Trustee. The motion to incur, if approved, will not have any affect on what you have already done. Think of it as finishing the paperwork after you had to do something desperate.

(In some cases, it's better to ask forgiveness than to ask for permission. Don't ask me how this works for bankruptcy!) Taking care of your family and making sure you are safe and have a roof over your head, is more important than some o things. So long as you're not doing something illegal, I will always side with you on taking care of family.

[keepsmiling]

Agree with JB on the above! Your family's health and safety is #1, and I would battle to the death any trustee who put his percentage or the creditors' before that.
That being said, I have to ask. (hope you don't mind)... with your situation, WHY are you in a 13? You sound like a candidate for a 7 to me.

[IZBROKE]

Thanks justbroke---nothing illegal, we are to old for that...
My wife and I have been through a lot in the last 2 years---I was in ICU 3 times and my wife had a fast growing cancer with some major surgeries.
I have a social security disability hearing next month. My wife works very hard everyday and she is worried sick about this chapter 13.
It is killing me to see her worry.
Thank you for your post.
IZBROKE

[IZBROKE]

Hi keepsmiling,
We have had many health issues in the last 10 years. We had filed a chapter 7 earlier.
The medical bills are enormous.
Thanks
IZ

[keepsmiling]

So very sorry to hear.
Our medical system is sooo broken, to do this to people is a crime.
I assume you applied for charity care.

[dmc-2008]

Yes the system is so broken! We all seem to be put in a place to worry so much about miney, I know it exacerbates my trouble too, take care!

[IZBROKE]

PANICKED!!!! SICK!!!! Very long post PLEASE HELP US!!

Hi,
Well the lawyer finally emailed me back (really the paralegal).
I know most forum members are not lawyers but need a little help filling out some forms.

Here is the email I received:
I spoke with Mr. XXXXXX this morning about your case. He did speak with XXXXX about how to handle the situation with purchasing a mobile home. The Trustee has asked that you go to he/she site to print and complete the documents for permission to purchase/finance. Send the completed forms to he/shes office as soon as possible. He/she will review the forms and your case and then make a decision on the matter. Mr. XXXXX was pretty confident XXXXX would approve your request without having to file a motion and accrue additional attorney fees.

The form they want me to fill out seems easy and tricky? Hell I don't know??
The total cost of the mobile home is $20K.
I put $1K as a down payment.
Getting $10K from dad as a gift/loan---it is really both---plan on paying him back. What would the trustee want to see it as?

Here are parts of the form I need help with:

Name of Lender: __________________________________________________ _____________
Amount of Loan: $_________________________________________________ ______________
Interest Rate:_____________________________________________ ______________________
Monthly Payment:__________________________________________ _____________________
Amount due credit Grantor:__________________________________________ _____________
Number of montly payments:_________________________________________ _____________

I am not sure how to fill this out. My dad has already give me---what he calls a gift of $10k for a down payment but I plan on paying him back when I am approved for social security. Does this make it a gift or loan? It would be at 0%. And what should I put for number of payments?

The guy selling me the mobile home says at least pay him $100 and more when I can at ZERO %. I owe hime $8K on the balance. This messes things up because how many number of payments.
And do I have 2 grantors?






Amount of down payment: $
Source of down payment:__________________________________________ ____
__________________________________________________ _________________
__________________________________________________ _________________

Payment Source: Will the monthly payment on this new loan be made in addition to or in
replacement of some payment you are already responsible for in your Chapter 13 plan or
budget? Explain. (Consult with your Attorney as to whether a “Request for Modification” of
your plan will be necessary.
__________________________________________________ ____________________________
__________________________________________________ ____________________________

This process will make my total monthly payments a little cheaper than the mobile home we are losing the lease on.
It sounds like my lawyer is confident the trustee will approve my request----any opinions on that?

We have already purchased the mobile home out of necessity due to losing our lease. We just need to fill out some more paperwork.
I know it wasn't the way the trustee states how to do things but it is either a roof over our head or not.

My wife works really hard to provide for us. Priorities for us are: housing, food, and lots of medication. I take 12 different meds a day and my wife is on just about the same amount...
It takes around 20 days to get an answer on this question if we are allowed to incur debt.
Like I said we have put the cart before the horse.
What happens if they deny my request and seeing though we have already incurred the debt?
Will our 13 be dismissed? And what are our options if that happens?

It is very hard to get any questions answered from my attorney. What really throws me into insanity is when I email him 3-4 questions and he only answers one and than gets bent out of shape when I ask his advice on the questions he didn't answer!!
I am sorry about all the questions----we have nothing and are worried sick!!
Prayers needed x billion!!
Thank you
IZ

[IZBROKE]

We have already incurred the debt----Panicked!!! Very Long Post...

Hi, and thanks for your support.
I heard back from the lawyers office via email and this is what they wrote:

Mr. XXXXXXXX [edited by moderator to remove name],
I spoke with Mr. XXXX this morning about your case. He did speak with Ms/Mr XXXX about how to handle the situation with purchasing a mobile home. The Trustee has asked that you go to her site to print and complete the documents for permission to purchase/finance. Send the completed forms to his/her office as soon as possible. She will review the forms and your case and then make a decision on the matter. Mr. XXXX was pretty confident Mr/Ms. XXXX would approve your request without having to file a motion and accrue additional attorney fees.

On the trustees web site about incurring debt I only have to fill out exhibit 1 because the amount of money used and payments ends up either being the same amount going out monthly or a small amount higher.

Here is the whole deal:
Mobile home price $20K
My dad is putting in $10k cash in and he doesn't care if I call it a gift or loan---I will pay him back in full if and when I get social security disability. I have an administrative law judge hearing in a couple of weeks to determine if I will get disability----What should I call this a gift or a loan? What works better for the trustee?
We put a $1k deposit on the mobile home.

I am copying the exhibit 1 form below with some questions.

(Exhibit 1)
LOAN INFORMATION
(Type or Print Clearly)
(This form must be completed in its entirety)
Case Number:___________________________________________ _______________________
Name(s) of Debtor(s): __________________________________________________ __________
Address of Debtor(s): __________________________________________________ __________
__________________________________________________ __________
Daytime telephone including area code:
Husband ____________________________
Wife _______________________________
Name of Lender: __________________________________________________ _____________
Amount of Loan: $_________________________________________________ ______________

How much is the loan amount due to the info above? Is it the $9K that is left after my deposit and my dads $10K or is it my dads $10K plus the rest of the amount due minus the deposit I put down which would be $19K? Again do I call my dads cash a gift or a loan?

Interest Rate:_____________________________________________ ______________________
Monthly Payment:__________________________________________ _____________________

The guy selling the mobile home is only requiring us to pay a minimum of $100 on his amount due of $9K. He knows our situation and has really done everything to help us with ZERO interest-----> he trusts we will pay him more and more as we stabilize from all this.
My dad would be OK with us paying him from the back pay from social security if I get it, or wait until chapter 13 is over, I really don't think he cares if he gets paid off but I need to do the right thing---> gift or loan?
That would make it a $100 payment a month for the guy selling it and not having to pay my dad back right away.
So would the monthly payment be $100?

Amount due credit Grantor:__________________________________________ _____________

This amount would be $9K

Number of montly payments:_________________________________________ _____________

I have no idea how many payments its going to take to pay him off with the info I have stated above. Any thoughts?

Reason for Loan:
If this request is for a vehicle loan, provide:
Make of vehicle: __________________________________________________ _____________
Model of vehicle: __________________________________________________ _____________
Year of vehicle: __________________________________________________ ______________
Extras: __________________________________________________ _____________________
__________________________________________________ ____________________________
If this vehicle will replace another vehicle, provide the following information for it being
replaced:
Reason: __________________________________________________ ____________________
Make: __________________________________________________ ______________________
Model: __________________________________________________ _____________________
Year: _______________________________
Monthly Payment $____________________
Is it paid through Trustee ______________ or direct _______________
Prior Requests: Have you made any prior requests for loan approval while in Chapter 13? If so,
give the dates, amounts, tell us whether the loan requests were granted or denied and give us
the status of the loan payments (i.e. paid, current, delinquent, etc.).
Date Amount Granted/Denied Status
__________________________________________________ __________________
__________________________________________________ __________________
__________________________________________________ __________________
__________________________________________________ __________________
__________________________________________________ ____________________________
Down Payment: What is the amount of the down payment on this transaction, if there is one,
and what is the source of the down payment:

This would be $10K from my dad. ----> gift or loan?
Amount of down payment: $
Source of down payment:__________________________________________ ____
__________________________________________________ _________________
__________________________________________________ _________________
Payment Source: Will the monthly payment on this new loan be made in addition to or in
replacement of some payment you are already responsible for in your Chapter 13 plan or
budget? Explain. (Consult with your Attorney as to whether a “Request for Modification” of
your plan will be necessary.

This would be in place of the mobile home we are losing our lease on.

__________________________________________________ ____________________________
__________________________________________________ ____________________________
Where would you prefer we send the Trustee’s Response?
Address: ________________________________________________
________________________________________________
________________________________________________
Or Fax: ________________________________________________
Attn:____________________________________________

We have already signed all the papers and gave the seller $10K plus our $1K deposit. I realize we put the cart before the horse but this was out of necessity to keep a roof over our head. Our priorities are a roof over our head, medication---I am on 12 pills a day and my wife is about the same, and than food.

According to the above email my lawyer seems confident we can get this done. What happens if the trustee rejects us? What if any options will we have?

Should I add a letter with this exhibit 1 to explain things? I think if i did that it would be too much information. I want to keep this simple and clear.
We are at wits end with fear of blowing our chapter 13.
I realize most forum members are not lawyers but sometimes it takes someone who has been personally through the same thing to help another. Takes one to help one.
I know I will get some advice to talk to my lawyer----he takes way to long to get back with me if he does at all. I can't wait on him and not here anything for 1-2 months---this is killing my family here.
Thanks for taking a trip through my personal hell. I'm just really upset. At what I don;t know. We need to get this done and move on with our lives.
Thank you!!
IZ

[justbroke]

If you are paying back the $9K, then that's $100 a month for 7.5 years ($9000 / 100 / 12). Just fill it out as though you haven't purchased the property. The Trustee is trying to see if it affects your Plan at this point. After you have completed the form, ask your attorney any questions that you have regarding any specific details. I suppose your interest rate is 0%. You would need to get that from your Sale Agreement. You do have a sale agreement or some sort of installment agreement, right?

All your answers seem correct. You have a $10K down payment and it was a gift.

Don't worry about the Trustee not approving! They only care how it affects your Plan! They may also be interested if your housing cost is lower, if they will increase your Plan payments. If you have lot rent, don't forget to mention that probably on the Payment Source line. For example, you wrote " This would be in place of the mobile home we are losing our lease on." You may want to extend that to include that you will have additional lot rent and taxes, but the total does not exceed the amount that you are allowed for housing mortgage/rent.

If you really don't understand these things you really need to ask your attorney nicely if you can come sit with them and fill it out. By sit I mean to make an appointment for face-to-face time in the office, not going back and forth over email. (That will cost you some fees, but it may be worth it.)

[IZBROKE]

Thanks Justbroke,
Yes we have a sales agreement. The installments are a minimum of $100 because he is helping us out. Is the trustee going to trip out at that $100/mo for 7.5 years?
What and how much would be Amount due credit Grantor:_____ on the form I posted?
Thanks
Iz

[justbroke]

Thanks Justbroke,
Yes we have a sales agreement. The installments are a minimum of $100 because he is helping us out. Is the trustee going to trip out at that $100/mo for 7.5 years?
What and how much would be Amount due credit Grantor:_____ on the form I posted?

The Trustee would (should?) only care if a.) your total cost of housing increases by more than about 10% over what you're paying now, or b.) you pay it off quicker than the time you will remain in the Chapter 13 (e.g. you pay it off in 2 years, the Trustee would want the $100/month going to your unsecured creditors for the 3rd and last year of your plan).

You already mentioned that you will owe the credit Grantor $9,000 after the $1,000 deposit and $10,000 gift (for the $20,000 sales price).

The only problem I keep seeing is that you're saying, on one hand, that your dad gave you a gift, but on the other hand, you mention that your "dad would be OK with us paying him from the back pay from social security if I get it, or wait until chapter 13 is over". It's either a gift or it's a loan... it can't be both. This is why the Trustee wants to know the source of the down payment. Otherwise, you would create a promissory note to your Dad as well. I know you're trying to keep it simple, but you keep saying things that make it not so simple. Just have your Dad gift the down payment to you with no expectation of it being repaid. If you repay it... so be it, but it wasn't a loan.