Trustee moved to dismiss..............

[hrh25]

[HHM]

That basically makes sense (although the distinction the attorney is drawing between a lien strip and a cramdown is oversimplified and little inaccurate, but I digress). A cram down is where you "reduce" the lien to current market value, but continue to pay on it. (you used to be able to do that with cars, i.e. car worth $9,000, but loan balance is for $14,000, in a chap 13, you used to able to pay the car off in the chap. 13 at the $9,000 figure)). Where as a lien strip is basically where you tell the lien holder to go "F" themselves

As for the attorney fees, typically, the fee covers everything to get your chapter 13 plan confirmed. (So this Pond Motion would typically be EXTRA). The 10% the attorney is referring too is probably the "Trustee Fee". For all money paid into the chapter 13, regardless for the reason, the trustee gets 10%.

As for the appraisals, you hit the nail on the head. It comes down to a battle of the experts and who does a better job of convincing the judge that their appraisal is correct.

[hrh25]

So do you think its worth it? If the equity is over by $5000 only can you not just pay that difference? It sounds like he is saying its all or nothing, meaning if there is even a penny the second mortgage does not come off. I have asked other lawyers about this but it seems like not many have done them in recent years.

Appraisal is another and who knows what that will come back, but looking at the second mortgage companies free apprisal its $75,000 less then even the first mortgage.

Wonder if i should stick with chapter 7 and be happy that get rid of the credit card debt.

Thanks

HRH

[HHM]

I don't recall if you mentioned how much credit card debt you have...but you need to look at the net result.

Your options are
1. File Chapter 7, eliminate all unsecured debt, but continue making payments on the second mortgage. As a result, the lien stays on your house, and if you ever go to sell the house, the lien will have to be satisfied one way or the other.
2. File chapter 13, pay into a chapter 13 plan for 60 months (maybe 36), pay off some to all of your credit card debt during that time, but "possibly" eliminate the second mortgage on your house.

What the one attorney says makes sense, but I don't have the research to say one way or the other for sure. I think a lien strip is an "all or nothing" proposition. Because lien strips are distinct from cramdowns. From a technical stand point, section 1322 allows you to "eliminate" the lien (if your in a jurisdiction that allows it in the first place) if there is NO value securing the lien, but you CANNOT "modify" the lien by reducing the lien to the current value (i.e. a cramdown).

Basically, which way you go depends on a numbers crunch to see which is really better for you.

[hrh25]

Thanks HHM, my credit card debt is over about $125,000 the second mortgage is $114,000 so its alot of money either way.

If possible of course getting them both off in five years sounds alot better, but am wondering if i would given alot harder time because of the amount of debt it will add up.

Also, i guess even on the high end if i pay $1250 a month thats only $75000 in five years. I would have to be in a 60 month because of our income and my wife would also have to file as she is on the title also.

Also, how do i find out if my jurisdiction is one that allows section 1322?

Thanks

HRH

[PaKettle]

Trustee moved to dismiss because I contribute 300 a month to my 401k and have a 200 a month 401k loan repayment, they said that with that I should have $431 to put in a repayment plan for a 13. My lawyer says that in a 13 you can claim those and then that would take away our ability to repay. So I do not know what is going to happen, has anyone else run into this? Also if the 7 trustee sets a dollar amount that he thinks we should be able to repay like the 431 he states in his move to dismiss can we just use that figure for our 13? Any input would be appreciated.

What I'm wondering is: Why didn't the attorney know that your contributing $500/month to your 401k was a problem in the first place?

Man, I am seeing a lot of attorneys making mistakes on these bankruptcies!

My friend just had a bankruptcy too, where the attorney originally told him he qualified for a 7, so my friend paid the money and then when it came time to file, the attorney told him he'd have to file a 13 instead! Why did he not figure that out until the last minute???

The best defense for this type of stuff is to arm yourself with knowledge before filing! Come here and read, ask questions, and study your issues, and maybe read the Nolo or Dummies Banrkuptcy books!

[HHM]

My friend just had a bankruptcy too, where the attorney originally told him he qualified for a 7, so my friend paid the money and then when it came time to file, the attorney told him he'd have to file a 13 instead! Why did he not figure that out until the last minute???

That is a little different scenario...the attorney can only give a vague idea about which chapter a person can file at the initial consultation. Only after the attorney is retained and gets to look at the entire case in detail, can a final determination be made. That is not to say that a "bait and switch" does not happen, but really is NOT common practice. The rules on chapter 7 and chapter 13 are easy when a person "easily" qualifies for a 7 or not, but when a person is on the bubble between a 7 and 13 that things get hazy, even for attorney's and trustees.

But you are correct...the attorney should have given you some heads up that that 401K was probably going to be an issue. You can usually get away with small 401K contributions, or a small 401K loan repayment, but its doubtful many US trustees would allow the debtor to do both and maintain a chapter 7.

[Bankruptcy Atty]

Yes

Trustee moved to dismiss because I contribute 300 a month to my 401k and have a 200 a month 401k loan repayment, they said that with that I should have $431 to put in a repayment plan for a 13. My lawyer says that in a 13 you can claim those and then that would take away our ability to repay. So I do not know what is going to happen, has anyone else run into this? Also if the 7 trustee sets a dollar amount that he thinks we should be able to repay like the 431 he states in his move to dismiss can we just use that figure for our 13? Any input would be appreciated.

THERE IS CASE LAW ON MAXIMUM CONTRIBUTIONS. IS THERE AN I/J PROBLEM OR MT PROBLEM. ALSO, IT SOUNDS LIKE YOU ARE OVER THE MT CAP. YOUR ATTY DOESN'T SOUND "UP" ON THIS STUFF.

[CATCHMEIFYOUCAN]

401k Slydog

Trustee moved to dismiss because I contribute 300 a month to my 401k and have a 200 a month 401k loan repayment, they said that with that I should have $431 to put in a repayment plan for a 13. My lawyer says that in a 13 you can claim those and then that would take away our ability to repay. So I do not know what is going to happen, has anyone else run into this? Also if the 7 trustee sets a dollar amount that he thinks we should be able to repay like the 431 he states in his move to dismiss can we just use that figure for our 13? Any input would be appreciated.

Interesting, I filed in N.VA at first Ch13 and had $600 going to my 401l plan(s) due to having 2 full time jobs (loan repayments and additional 6% just to savings from both jobs), but the trustee never mentioned anything???

Just my 2 cent experience, Catchmeifyoucan

I just wanted to add I had really great lawyer, to me he was great. From Ch13 and able to convert Ch7, no objections only from the Trustee himself if anyone is interested in knowing his name and website (PM me).

[CindyLou]

Trustee moved to dismiss because I contribute 300 a month to my 401k and have a 200 a month 401k loan repayment, they said that with that I should have $431 to put in a repayment plan for a 13. My lawyer says that in a 13 you can claim those and then that would take away our ability to repay. So I do not know what is going to happen, has anyone else run into this? Also if the 7 trustee sets a dollar amount that he thinks we should be able to repay like the 431 he states in his move to dismiss can we just use that figure for our 13? Any input would be appreciated.

I was contributing 400/month but had been doing so for a while,so the trustee asked me when I started. She said because it appeared I started that before I decided to file she would let it fly. I've heard two years is a good rule of thumb.....