Oh what a year it's been. I'm seeking opinions on my course of action. Sorry if this is a bit long for a first post... 
Apr 08: Filed 13, elected to keep house and 2 new cars (one leased, one financed). Plan payment was horrendous (house worth less than owed, but we wanted to try to save it - keep child in same school and not move). Regular mortgage payments were $3750. Monthly plan payments were nearly $5K.
Jul 08: Wife lost job before 13 confirmation hearing. We voluntarily converted to Ch 7, deciding to give back the house and one car (the financed one). Even with over-median/high income, we 'passed' the revised means test (no presumption of abuse). 13 Trustee paid what was owed to car lease/lien-holders, and refunded rest back to me (they didn't pay any to mortgages!). Atty seemed to think we'd be ok. We decided that it was foolish to try to save the house - in todays' market - it was a bad investment. We used about half of the CH13 'refund' to pay cash for a 10-yr old used car to replace the vehicle to be surrendered.
Sep 08: New 341 hearing w/ Ch 7 Trustee. UST shows up and asks how long since we last paid our mortgage (Dec 07). Asks if we've found a place to live yet (we said no, which was true - was hoping to stay in house until foreclosure was completed). Asked what we were looking to pay in housing going forward. I threw out a number ($1500/mo).
Of course, 10 days later the UST filed a statement of presumed abuse citing 707(b), presumably after reviewing at what my Schedule J was going to look like after starting to pay the lower rent. After running the numbers myself, heck, it'll be nearly a 100% repayment plan to the unsecured creditors!
I have a call into my atty to discuss, but it sounds like they're going to push for conversion back to a 13 (can they do that if the case has already been converted once?), or dismiss.
The whole reason we started down this BK path was to save the house. We now have come to accept that we'll be moving at some point, regardless of whether we're in a BK status or not. If we stick with it, convert back to a 13, we end up paying like, 99% of our unsecured's (almost $80K), and we'll be on a very strict budget for the length of the plan.
We are VERY seriously considering letting the case be dismissed, and just fending for ourselves. We stay in the house until they tell us to get out, and in the meantime, make arrangements with the unsecured creditors to either get caught up, or 'settle' for something less than the full debt. Now whether they'll be willing to work with us is another question - perhaps engage one of the oft-advertised agencies that offer to 'settle' your debt for something less than full value?
The sale of the house will surely pay off the first mortgage, but will very likely leave about a $40K-$70K deficiency on the 2nd. In Ohio, my atty says they can only attempt to collect for 2 years after foreclosure, and they rarely bother, in his experience. My second is with Homecomings Financial, if that matters.
We'll let the car we planned to surrender get repo'd if necessary - but a quick check shows that Carmax may offer to buy it for just about what we owe on it! Probably better to do that, maybe pay a little bit out-of-pocket to cleanly get out of that loan rather than repo.
Our credit is already in the tank from the BK filings, so another few months of negative reporting by my creditors doesn't bother me. One thing I haven't checked is how a BK dismissal is recorded in your credit history. Surely the BK filing isn't 'removed' if your case gets dismissed, does it?
I've read a number of other postings, but haven't come across anyone that's been in my particular situation. I do appreciate your taking the time to read and give me your thoughts.
-Big E
Apr 08: Filed 13, elected to keep house and 2 new cars (one leased, one financed). Plan payment was horrendous (house worth less than owed, but we wanted to try to save it - keep child in same school and not move). Regular mortgage payments were $3750. Monthly plan payments were nearly $5K.
Jul 08: Wife lost job before 13 confirmation hearing. We voluntarily converted to Ch 7, deciding to give back the house and one car (the financed one). Even with over-median/high income, we 'passed' the revised means test (no presumption of abuse). 13 Trustee paid what was owed to car lease/lien-holders, and refunded rest back to me (they didn't pay any to mortgages!). Atty seemed to think we'd be ok. We decided that it was foolish to try to save the house - in todays' market - it was a bad investment. We used about half of the CH13 'refund' to pay cash for a 10-yr old used car to replace the vehicle to be surrendered.
Sep 08: New 341 hearing w/ Ch 7 Trustee. UST shows up and asks how long since we last paid our mortgage (Dec 07). Asks if we've found a place to live yet (we said no, which was true - was hoping to stay in house until foreclosure was completed). Asked what we were looking to pay in housing going forward. I threw out a number ($1500/mo).
Of course, 10 days later the UST filed a statement of presumed abuse citing 707(b), presumably after reviewing at what my Schedule J was going to look like after starting to pay the lower rent. After running the numbers myself, heck, it'll be nearly a 100% repayment plan to the unsecured creditors!
I have a call into my atty to discuss, but it sounds like they're going to push for conversion back to a 13 (can they do that if the case has already been converted once?), or dismiss.
The whole reason we started down this BK path was to save the house. We now have come to accept that we'll be moving at some point, regardless of whether we're in a BK status or not. If we stick with it, convert back to a 13, we end up paying like, 99% of our unsecured's (almost $80K), and we'll be on a very strict budget for the length of the plan.
We are VERY seriously considering letting the case be dismissed, and just fending for ourselves. We stay in the house until they tell us to get out, and in the meantime, make arrangements with the unsecured creditors to either get caught up, or 'settle' for something less than the full debt. Now whether they'll be willing to work with us is another question - perhaps engage one of the oft-advertised agencies that offer to 'settle' your debt for something less than full value?
The sale of the house will surely pay off the first mortgage, but will very likely leave about a $40K-$70K deficiency on the 2nd. In Ohio, my atty says they can only attempt to collect for 2 years after foreclosure, and they rarely bother, in his experience. My second is with Homecomings Financial, if that matters.
We'll let the car we planned to surrender get repo'd if necessary - but a quick check shows that Carmax may offer to buy it for just about what we owe on it!
Probably better to do that, maybe pay a little bit out-of-pocket to cleanly get out of that loan rather than repo. Our credit is already in the tank from the BK filings, so another few months of negative reporting by my creditors doesn't bother me. One thing I haven't checked is how a BK dismissal is recorded in your credit history. Surely the BK filing isn't 'removed' if your case gets dismissed, does it?
I've read a number of other postings, but haven't come across anyone that's been in my particular situation. I do appreciate your taking the time to read and give me your thoughts.
-Big E
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