Living life in Chapter 13 versus Chapter 7 - compare experiences

[moe]

Well, the situation is that our parents gave us money to buy our house and we have to pay them back someday.

If we can pay our mortgage for...I don't know...10 years? and the market stays even as flat as it is now, we CAN pay them back.

Houses like ours have actually gone up in our neighborhood. They sell, eventually.

Our parents would not understand if we did not pay them back.

Obviously, buying a house was the biggest financial mistake we've ever made. We regret it endlessly but are trying to make the best of a bad situation. Under normal circumstances, we'd actually be OK. If we had not had financial trouble in the past, we'd be OK. Also, if we were not idiots in various ways with money.

But I'm not sure about 'won't be allowed to.' What do you mean: 'Won't be allowed to'?

If they counted our actual mortgage in our allowable expenses, then we would be allowed to. We can definitely afford our house if our credit card debt payments were reduced.

We are in the situation of having the usurious interest rates on credit cards. That is our situation. It is just not sustainable with those interest rates. Even if we had low interest rates like we used to we can pay everything.

So would we be allowed to keep our house in those circumstances?

I mean, at this point we can pay everything every month. But we're at a tipping point due to credit cards that went into higher interest rates. So this is why I am considering bankruptcy. Our credit card debt is now ENORMOUS.

Obviously, we were unemployed/underemployed during certain years and this is how everything went to hell. Now we are fully employed, a fact for which I am endlessly grateful. But screwed via credit cards.

Thanks for everyone's help! This site is great!

[LadyInTheRed]

Moe, without knowing your income, mortgage and other secured debt payments, other expense, household size and how much you are in arrears on your secured debt payments (if any), it is hard for anyone to predict what will be allowed in your Chap 13.

If you had no credit card payments, could you easily afford your house payment, property tax, insurance and maintenance expenses in addition to your other living expenses? If so, that's a good sign you can afford your house. The next thing to figure out is whether you can fund a feasible Chap 13 plan.

This is getting off the topic of the thread. If you have more questions about this, you should start another thread and provide some specific details about your situation.

[moe]

Thanks. When I figure my situation out a bit more, I'll be back.

I am sorry. I didn't mean to derail the thread.

[LadyInTheRed]

Thanks. When I figure my situation out a bit more, I'll be back.

I am sorry. I didn't mean to derail the thread.

No reason to be sorry. Threads get a off track now and then. It's the natural course of conversation. It's just good to realize it and let it get back to the original topic in case people want to continue that discussion.

[dbr]

OK please explain, if the house payment ins, taxes are all allowed and figured in the plan, how can somebody say you maynot be able to afford to keep the house.

If the 13 payment is based soley on DMI, the house payemnts will lower the DMI because it is allowed right? No matter what the amount??

Almost seems like the higher the house payment the better, less for creditors?????

What am I missing here. "The numbers must work", how can they not work after you have all of the allowed expenses and they meet the requirements.

[newbie2]

OK please explain, if the house payment ins, taxes are all allowed and figured in the plan, how can somebody say you maynot be able to afford to keep the house.

If the 13 payment is based soley on DMI, the house payemnts will lower the DMI because it is allowed right? No matter what the amount??

Almost seems like the higher the house payment the better, less for creditors?????

What am I missing here. "The numbers must work", how can they not work after you have all of the allowed expenses and they meet the requirements.

Reread what LadyinRed wrote: "If you had no credit card payments, could you easily afford your house payment, property tax, insurance and maintenance expenses in addition to your other living expenses?"

Many people have such high house payments that they simply cannot afford the house AND keep the utilities on, food on the table, insurance, medical expenses, etc. That's what we mean when it is said "the numbers must work".

[moe]

Yes, we could afford our house payments if we had no credit card debt. I don't know about 'easily' but we could certainly afford it. It is not that far off what rent would be were we to rent a similar place.