I need your help, advice please!!!

[Mere]

Ok, I went to our attorneys office today, to go over some final paperwork, get credit counseling information, and discuss the plan payment...we are going to be a ch.13.

This is where it all goes downhill...they are stating our plan payment is going to be $1,663.11 per month, OMG!!!

The problem is this, last year my husband made $20,000 more for the year, in late November he took a new job along with the decrease in pay, a trade off for stability in his job.

On the paperwork, our actual DMI at this point and time is about $500.00 per month, which is in line with the payment I expected.

I asked the paralegal what we can do to lower the payment (I mean this plan is set to fail) she said you should WAIT!!! to file, for every month we wait it will lower the payment by about $200.00...OK that would work if I were not being sued by Chase bank, and am risking a judgement.

So my delima is do I allow a possible lein on the property to allow 5 months to pass to lower the monthly payment? or do we just file? and try and live with this crazy payment...well not even an option the money is not there.

I asked her if we could file and then rework the numbers before confirmation in the next few months, and she said if a trustee sees a payment like that, he is not going to let it go easy, it may be lowered but not by very much.

It's the 6 month look back that is killing us!!!

What do I do? I don't even know what a lein on a property is really, but I will tell you we are not planning on moving for at least 8-10 years, because of children.

She also stated worst case, which never really happens the sheriff will come and sell all contents of the home to satisify the debt for Chase.

So file and suffer, or accept a possible lein?

Thank you all in advance, I appreciate all advice and additional questions.

[sealpup]

This by no means is professional advice, just from my experience what I would do. If it were me- I'd call Chase bank, explain your hardship to them. Possibly even tell them you are trying to avoid a BK. See if you can work out some kind of a payment arrangement with them. They certainly don't have to, but from my experience they are willing to work with you to get their $.

I've never done it with Chase, but did it w/Cap One and Discover Card at the point they had reached a lawsuit, I had filed an answer and we were set for mediation. The most one wanted from us a month was $250. One we even said we'd pay $50 a month until my husband got a job, then we would tell them and the payments would increase.

It may require you to have a stipulated judgment against you, but if you are paying on it and keep the agreement they won't garnish/put a lien on your home, sell your stuff, etc. If you can work out a payment plan which would keep it out of court, it could buy you several more months. Then in a few months when your figures are looking better, quit paying on the payment plan (we are not paying our 2 payment plans for the first time this month and plan on filing next month), and then file your BK.

Why go into a 13 plan that is doomed to fail? For me it would make more sense to throw some $ at Chase over several months, to avoid a payment plan of over $1600/month! We have a lien filed on our property from our HOA and nothing has come of it. I didn't even know we had it until I looked it up in the court records. But we are in a payment agreement with the HOA as well. I hope that makes sense, and maybe helps a bit!

[SunshineGal]

I'm not an expert either, but from what I understand, the chapter 13 plan should be based on your schedules I&J, not the previous 6 months income. What all is included in the plan payment? Are they including a mortgage and car payments, etc?

[LadyInTheRed]

Mere, I'm assuming the paralegal did not go discuss your questions with the attorney before answering them? Call your attorney and discuss the decrease in income with her. She may give you different answers than the paralegal. Ask her about the decision in Hammilton v. Lanning which says that Schedule J is forward looking. Even if it weren't for that decision, the fact that the trustee won't let a higher payment "go easy" is not a good reason to rule out petitioning to modify the plan later based on a premantent decrease income. The judge will rule on the facts and the law, regardless of what the trustee wants.

ETA: Here's the court's conclusion from the link above:

We find petitioner’s remaining arguments unpersuasive. Consistent with the text of §1325 and pre-BAPCPA practice, we hold that when a bankruptcy court calculates a debtor’s projected disposable income, the court may account for changes in the debtor’s income or expenses that are known or virtually certain at the time of confirmation. We therefore affirm the decision of the Court of Appeals.

[SunshineGal]

I just wanted to ad that the chances of the Sheriff coming to get your stuff is next to nil and a lien on the property can be vacated in BK, so I really wouldn't worry too much about the judgment unless they garnish.

[Mere]

Our state has a no garnishment law, which is good. I am going to send my attorney an email regarding this, and see what he has to say, so far he has given me good advice (fingers crossed).
My worry is if Chase is suing me, the rest aren't far behind, and there are a lot of them, so cutting deals would be a long shot, and lots of additional stress.
I too believe the payment should be based off of current day numbers, why this is not happening I do not know. It is possible my attorney has not even seen the paperwork yet. I will give him the above info, and discuss, basically the money just isn't there, and the plan is set to fail.
How can you expect someone to pay money they don't have?

PS- The quoted payment did not include cars, or mortgage, it was just to creditors...$1663.11 per month

[shark66]

When rolling downhill, downshifting is usually a good idea...

I wouldn't bother calling Chase. They are lowlifes to begin with, not to mention that any deal you'd make with them could get you "preferential payment" issues later on in the BK process//.

Let's look at the worst case scenario:

They are suing you. They get the default judgment if you don't appear in court. And then what?

Put a lien on your house? Maybe - maybe not.

Is the house in both of your names?

Is the debt that you're being sued for in both of your names?

Unless the answer to both questions is "yes" you've got nothing to worry about. Not in your state.

Therefore, take your time, get your ducks (as in numbers) in a row and wait as long as needed to file - but don't procrastinate.

If a lien gets placed on your personal property (a long stretch, but theoretically possible) it can be vacated once you've been discharged.

Good luck.

Good luck.

[tyson24]

Mere,

I was kind of in this situation before I filed. It looks best for you to wait. I know that is really easy for me to say because the lawsuits are in my rearview mirror, but if you jump ahead six months and look back, you will be glad you did. $1600 is a lot of money when your income has declined.

I wish you luck in whatever you decide!

Let me just tell you too, that I called my attorney now that we are discharged to get the paperwork to have the judgments against my husband vacated in court...GUESS WHAT? Capital One, the one we thought was garnishing...never even had a freaking judgment!!! They never filed it, but only sent paperwork like they did.

They forced us to file before we wanted to, but I sure am glad we did

[lolly78]

I'm in the same situation as you, just my husband is not getting the overtime he got last year. Our means test now says we DMI of $2025 and the schedule J only has about $1500. I guess they think I can pull the rest of the money out my a$$!!! Will the trustee object if he thinks the plan is not realistic? I'm just ready to file myself to get this over with!

[SunshineGal]

Let's look at the worst case scenario:

They are suing you. They get the default judgment if you don't appear in court. And then what?

Put a lien on your house? Maybe - maybe not.

A lien on all *real property* is automatically created once the judgment is recorded in the Official Records for the county. Some states, PA may be one, not sure, have a tenancy by the entirety law which basically means that a creditor of one spouse cannot take property that belongs to the marriage to satisfy the debt. So, if the deed to the home was vested to Mr. and Mrs. Mere, "Husband and Wife" OR "Tenancy by the entirety", than a judgment just against Mere would most likely be ignored by the settlement agent if they were to sell the property later. However, it's still best to have the judgment vacated as it can come back to haunt you later. I have no idea about the attorneys in PA, but mine didn't charge extra to vacate in a 13, just in a chapter 7.

One more thing about a judgment lien, it may attach to real property, but it attaches behind all other recorded liens (mortgages, etc) so the only real issue to worry about is the extra paperwork to have it vacated. A judgment creditor won't foreclose to satisfy the judgment.

http://www.pacode.com/secure/data/231/chapter3000/s3023.html

SG

[LadyInTheRed]

A lien on all *real property* is automatically created once the judgment is recorded in the Official Records for the county.

So, if the creditor doesn't record the judgment in the county where the real property is located, there is no lien against the real property, which is why shark66 says "Maybe - maybe not."

[SunshineGal]

The initial judgment gets recorded by the clerk once the judge signs it. Now, in FL, in order for a lien to be attached to real property a *certified copy* of the judgment must be recorded by the creditor. I'm not sure if that applies to PA law. But, it's very rare to see a judgment where a certified copy doesn't follow and the creditor can record a certified copy at any time providing the judgment is still valid. There can also be a back log before a recorded copy shows in the official records and lien priority depends on which was recorded first, so, most title companies are going to require the lien to be satisfied so they don't run the risk of having to eat it.

On a semi related note, if the debtor owns real property in different counties, a certified copy would have to be recorded in each county for it to be a valid lien.

[Mere]

Thank you all for your advice, some of it was a little over my head, but I will try and wrap my head around it after it write this post.

This is where I am at today regarding the above situtation, I spoke with my attorney on the phone today, and this is what he said...he told me to file a reply to the suit via his office, (cost $150.00) and drag this out as long as it can, he said this will buy us some time as a stall tatic. He also told me the courts are moving slow right now with all of the back and forth creditor stuff so that is good.

I asked him what their next move would be and he said a word that starts with an "A"??? Can you help me with that one?

I gave him some "what if" scenarios, and he told me try not it "what if" because it will make me crazy, and it's not worth it, we should cross our bridges when we get to them. Agree or Disagree?

I included the link in an email regarding the "forward thinking approach" and he kind of dismissed it, not saying it wouldn't work, but he also did not say that is our ace in the hole.

He said the longer we wait the better, However the thing that did make me feel uncomfortable was that he really could not recall the details of my case, which means to me he has many cases going on right now, and his paralegal is taking care of the paperwork. My question is she doing a good job??? Not sure on that one yet, but I am trying to be as proactive as I can in this process, so if I have to be a pain, I will.

As for the answers to the above questions, I own our home on my own, and the Chase card that has filed the suit is only in my name, where does that put me?

My husband has other cards, but is not on the deed, however he is on the second mortgage.

I appreciate all of your thoughts, I will wait to hear your feed back.

Thank you all!!!

[shark66]

As for the answers to the above questions, I own our home on my own, and the Chase card that has filed the suit is only in my name, where does that put me?

In your set of circumstances, the lien can be attached to the house.

Having said that, I wouldn't worry about that at all. Filing a Motion to Vacate once the BK is discharged is really not a big deal.

Which district in PA covers your area?

Good luck.

[Mere]

North Eastern District...does that help? Phila, Reading, Allentown