Including defaulted Mortgage payment in means test?

[imbarbara6]

Say we file chapter 7 and include the mortgage payment as an expense even though we are no longer making the payment and are going to let CW foreclose. Our mortgage payment is $2730. We have $30,000 in CC debt that we are going to include also. With the mortgage payment, at the end of every month and with all other allowed expenses on the means test, we are in the red by about $1,000. My question is, since we are going to let the mortgage company foreclose, will the trustee want to convert the CC debt to a chapter 13 or will it not matter since we are using the mortgage payment as an expense that still must obviousy count or else we would not be allowed to use it when giving up your home. Guess I'm just thinking how the trustee may think after the mortgage is gone (foreclosure) we may be able to pay those CC's.
How does this work? Please help me understand as I am confused as hell.

[imbarbara6]

Well actually we have not yet received a default notice from CW but as of May 1, we owe for April and May.

[fyi2]

what did you find out?

I have the same problem
did you get any answer?

i was told that you cannot include the payment in the means test for the months not paid so that would make you debt look less, I am so stressed out!

[eddiep]

YOu should still be able to include a "standard" amount for housing.

[imbarbara6]

Yesterday the attorney told me the mortgage payment is included in the means test wheather payments are missed or not because you are still responsible for making them until the mortgage company takes back the house.

[HHM]

Yesterday the attorney told me the mortgage payment is included in the means test wheather payments are missed or not because you are still responsible for making them until the mortgage company takes back the house.

That is the prevailing theory, but not all districts go with that and the US Trustee's still object.

[fyi2]

not current?

That is good to hear...still
I cant help but think they wouldn't count it in your expenses if you haven't been paying...know what i mean

I am right on the fence with the means test

i had to miss april and now may - i had no choice
I really don't get the means test it says i have money yet i DONT

the standard deduction for housing is 1515 but my mortgage and 2nd (late on both) add up to 1800

also this month i cannot pay my car- oy vey!

I have had a headache and stiff neck every morning for weeks I am convinced it is from tension/stress over this mess

Thanks for the feed back I would like to hear more as you go

[fyi2]

on CB

On credit boards I found this post:
Just visited a lawyer and he stated the following about the means test:

"Any secured debt not reaffirmed, is not considered in the means test. Thus since most of your debt is secured, you are only eligible for a Chapter 13."

This was a response:


It could be true if:
-you are above the median income and don't qualify for a 7 without passing the full means test; and
-You aren't reaffirming your secured debt; and
-without the payments on that secured debt, you don't qualify for a 7 based on too much disposable income.

For probably 99% of BK filers that isn't the case. Are you under or over the median income in your state?



Reaffirming would really be a bad decision for us since we are so upside down but I am so desperate to get this overwith.. and if i cant qualify on the means I wont be able to file

Distresses in Nevada

[StartingOver08]

Here is a more comprehensive answer on another board. It lists the various case law because apparently some districts will allow the expense and others will not.

http://debt-consolidation-credit-repair-service.com/forums/showthread.php?t=295001

[fyi2]

post

Thank You for the post that was helpful, I don't know what the thoughts are in nevada but I understand it better

[AfraidOfBK]

i am in nevada and my lawyer just told me that as long as the mortgage company ahs not begun the foreclosure process, and you are simply late or defaulting, then you cna include the unpaid monthly mortgage as an expense. Im not sure if this is because we would check the surrender box at the very last minute or what.


Im not sure but in my case, i think even without our mortgage we can bump up enough expenses (4 kids) to still be negative ea month (we are now)....

but even still, if the bank started to forelcose ( i have already received NOD but no foreclosure cuz Chase is in a foreclosure moratorium) you can use the rental allowance for nv, right?

[imbarbara6]

Today was the third lawyer I saw. He told me the same thing as the first and second.. we are in California and he said as long as we contractually obligated we can include the mortgage payment on the means test. He said it has nothing to do with when the lender files the default notice but rather doing it before they foreclose because at that point the lender has taken back the house.

[fyi2]

Ok I recieved clarification yesterday
If you plan to keep the property or other secured item you can still claim it on means test even if you are behind

If you are surrendering you cannot

[HHM]

Ok I recieved clarification yesterday
If you plan to keep the property or other secured item you can still claim it on means test even if you are behind

If you are surrendering you cannot

Yes, but you can run into problems with Chapter 7 if the property is in foreclosure at the time you file. You will not technically check the surrender box, but at the same time, there is no mechanism to cure arrears in a chapter 7, so the UST will sometimes object.

[imbarbara6]

Do you think it makes a difference when filing for Chapter 7 weather or not the lender has started foreclosure proceedings? or, even if you're already behind on the payment by 2 or 3 months? Sometimes its real confusing because I have seen 2 attorneys already this week and they both told me something different.