Which way to we turn?

[jade73]

Our problems began in July 2007 when my husband became unemployed for a year. My main concern was keeping food on the table and paying the mortgage. The mortgage got paid but was always late. Our troubles have just mounted from here. Once you get behind it's so hard to get caught back up with just the income you have. My overtime was also shut down during this time. What we need to do is start over since he is employed again. Here is our deal:

We have a 1st and 2nd mortgage on our home. This is the type of loan we had to get when we purchased the home.

We have two vehicles. Both are paid for.

Our yearly income is about $52,000.

We passed the means test.

We currently owe the mortgage on the 1st loan for May 1st. Payment is due for the 2nd loan for April 1st.

We have a signature loan at our Credit Union for $5,350 ($200.35/month)

We have an unsecured Loan @ Citifinancial for $10,000 ($179/month)

Credit cards in the amount of $1600 ($60/month)

Medical Bills in the amount of $1600 (not paying any of these right now)

My husband has a probation fine for $2800 (132/month)

Living Room & Bedroom Furniture only owe about $150

My sons Braces $2550 ($150/month)

Owe state income taxes in the amount of $245

1st Mortgage balance is $69,825 ($630/month)

2nd Mortgage balance is $23,275. ($235/month)

We have no savings, no 401K....nothing!

We live from paycheck to paycheck and but about $100/week on groceries.


We have to keep our home. We have two kids. One is 6 the other is 13.

The rate on the 1st mortgage is 9% and the 2nd mortgage is 11.75%. We tried to get a loan mod from our current lender, they lead us on for 6 months and then came back and told us we didnt qualify. We can't get refinanced because we havent been on time with the mortgage for 12 months


From the above...Do we need to file Chapter 7 or Chapter 13.

Gone Broke!

[justbroke]

First, to get into a Chapter 7, your allowed expenses must (generally) or nearly exceed your income. You didn't say anything about a car.

What really drives you towards a Chapter 13 is a.) whether you need to catch up on mortgage payments (seems like this will be the case), b.) have "disposable income" over about $100-166/month, or c.)

The signature loan would be gone (unsecured). The CitiFinancial loan would be done. Credit cards would go away too. Medical bills would probably go away too. The fine is not dischargeable. You probably don't need to work about the furniture (although it is secured, so you can count that payment in your secured payments).

That rate on your first mortgage is horrible! Do you know how much your home is worth today? What state are you in?

Can't really tell if you qualify for Chapter 7 or not.

[jade73]

First, to get into a Chapter 7, your allowed expenses must (generally) or nearly exceed your income. You didn't say anything about a car.

We have two vehicles, both are paid for.

Do you know how much your home is worth today?

2 years ago it appraised at $103,000. I forgot to mention that we have had our home on the market for 4 months now.


What state are you in?

Georgia

Another question. If you file chapter 13, do you continue to pay all your debts and pay the trustee your past due payment or does everything go into one payment, including the mortage? Does the interest on your mortgage stay the same?

[justbroke]

You no longer need to use large letters, as you certainly have our attention now.

Another question. If you file chapter 13, do you continue to pay all your debts and pay the trustee your past due payment or does everything go into one payment, including the mortage?

It depends on your District. In many Districts, you can ask to pay your mortgage and other secured debts outside the plan if they are current when you file. Otherwise, almost all Districts require that you pay them in plan (through the Trustee).

Since your vehicles are both paid for, and you're in the 11th Circuit, you should still be able to claim the ownership allowance, or at least some reasonable amount

You also may have some equity issues with the vehicles. First, there is only a $3,500 exemption in all vehicles. For any amount over that, you'll need to pay the Trustee (or, in a Chapter 13, pay the unsecured creditors at least that amount over the exemption). You may be able to use an unused homestead exemption too, but I don't know the current value of your home. I don't think you do, as your appraisal was 2 years or more ago and the market has changed.

It's probabyl time to get some consultations with several lawyers.

[jade73]

Do you have to pay back all the debt that you have or do they take off some of what you owe when you file Chapter 13?

We have an appointment next Sat to talk with a lawyer

[eddiep]

are you still paying on your credit cards and unsecured loans?

What was the reason you were denied a modification?

[relief13035]

Who is your mortgage lender?

[Naomi]

Here's a list for GA exemptions if you haven;t seen this already:

http://www.thebankruptcysite.org/exemptions/georgia.html

[jade73]

are you still paying on your credit cards and unsecured loans?

What was the reason you were denied a modification?

They said we were able to pay the mortgage. Thats all they said.

We are still paying the credit union b/c its deducted out of my paycheck. Havent been able to pay citifinancial

[jade73]

Who is your mortgage lender?

Litton Loan

[jade73]

Here's a list for GA exemptions if you haven;t seen this already:
http://www.thebankruptcysite.org/exe...s/georgia.html

Not really sure how to use this

[Naomi]

One of my concerns was our vehicles. My car has been paid off for years and is valued around $4000 or so. We owe about $9000 on my husband's truck and he wants to keep it.
With GA having an auto exemption of $3500...we should be ok...because I think it's doubled if we file together.

Do you have any idea what the value is of your vehicles? I would go to kbb or somewhere online and get an idea. If they aren't worth much, then there should be no problem.

Also, just knowing what is exempt (even though I don't completely understand it all either) made me feel better. I didn't know anyhting about bankruptcy and kind of thought you lost everything or were forced to give things up to pay off the credit cards.

[jade73]

Do you have any idea what the value is of your vehicles? I would go to kbb or somewhere online and get an idea. If they aren't worth much, then there should be no problem.

My grand am is 99 model, 194k miles, kbb says in excellent cond it would be $3780

His Chev s-10 is 2000 model, 140k kbb says in exc condition would be $5565

Neither are in excellent condition!

[eddiep]

[eddiep]

Naomi

In your post you mentioned keeping hubby's truck. I just wanted to remind you that you will need to exempt any equity you have in it. so you said you owe $9k, but if it is worth $15k you will need to exempt the $6k equity you have. I know most people do not have any equity if there is a loan, but you never know and you will want to be prepared for that possibility.