repeat filing : with home equity

[jstaley]

Hello all,
I'm in a bad situation - looking for advice. I successfully completed a 5 year chapter 13 plan not too long ago. My plan was very expensive so during the plan, I was extended a lot of credit - no court approval. I used the credit to help cover our overhead to ensure we would successfully complete the plan.
In addition, we used the credit to prepare to start a business for my wife which consisted of a hefty franchise fee, etc.

My spouse and I were both working during the plan but I was the only debtor.

My spouse recently lost her job , which we didn't foresee. She's currently working on getting the new business up, but it's costing us and we won't start to be profitable for another year or so. Without my wife's income , we're unable to cover our overhead.

My completed plan included a lien strip of a second mortgage which gives us equity, more than the homestead limits.

If we sold the house, we'd probably have enough to clear about 75% of our total unsecured debt.

Filing again is not something I prefer to do, but looking at options as we really don't want to sell our home AND there's not enough post-discharge aging to get a second mortgage (that coupled with my high utilization is not getting me approved - I tried)

I make most of the income so for now, we still have $ coming in to cover our overhead and most expenses but not all the unsecured debt payments - all at extremely high interest rates.

If I filed another 13, joint this time, I would have to pay at least the amount of equity I have in my home - which is a lot. I know the homestead limits wont help but not sure how the equity is exactly determined (sale proceeds minus comm etc)

Any thoughts , advice would be appreciated.

[justbroke]

I really don't know what to write. I'm sure you are beating yourself up for being back in this position. Your case wouldn't be considered a serial filing, so you will at least not suffer any of those issues. It is possible that you would be in a near 100% plan. You will need to figure out whether it is feasible for you to pay your existing mortgage, attorney fees that were included in the plan, the Trustee fee, and the value of the equity in the home to the unsecured creditors... if not 100%.

You will also need to look at the impact of a joint filing since your wife is in the startup-phase as a franchisee operator of a business.

I think you just bit off more than you can chew. Bankruptcy may be an option, but it may be detrimental to your current plan of operating that new business. You need more help than I can provide.

[AngelinaCat]

Welcome to the forum, but you probably aren't going to like what I have to say.

It appears that you learned nothing during the first Chapter 13. A Chapter 13 is an enforced budget that you must learn to live within. You haven't, and you opened a lot of new credit lines w/o permission of the trustee. If you do file again, you will be asked if you filed before, and why you are filing again and so soon.

There is another Chapter 13 filer here, that has done something similar, and is so close to finishing (12 payments to go) that they are sweating bullets hoping the trustee doesn't find out what they did.

I don't have pearls of wisdom for you at this time, but perhaps one of our other Moderators or members will.

Good wishes to you and gain, welcome.

[Drazil65]

Wow and I do not think OP is beating himself up for getting into this situation, more like scrambling to figure out how to file again and continue on this path of destruction and not get caught. Since you are here asking how to do it again there is no remorse or regret or inkling that you learned anything last time, you bucked the system last time and no doubt will do it again without too much thought.

OP: The hard truth is: You CANNOT afford the house, the new business or the continued use of credit. It is black and white, the numbers do not lie, you cannot afford it, get over it, sell the house (or whatever is left to do with it, short sale? FC?), forget the new business (wife needs to get new paying JOB asap) and you probably need to get 2nd job.

[despritfreya]

I successfully completed a 5 year chapter 13 plan not too long ago. My plan was very expensive so during the plan, I was extended a lot of credit - no court approval. I used the credit to help cover our overhead to ensure we would successfully complete the plan.

Unfortunately, this is not a successfully completed Chapter 13 (case #1). One should never have to incur debt to make a Plan work. You simply muddled through and got a discharge for the pre Chapter 13 debt. You now have to deal with the post Chapter 13 debt. The problem is. . . .

In the context of a Chapter 7 and assuming your Chapter 13 did not pay at least 70% of all allowed claims, you will not be entitled to a discharge unless you wait 6 years from the filing date of case #1. It goes without saying that any non-exempt property will be taken by the Trustee, discharge or not.

In the context of a Chapter 13, you must wait 2 years from the entry of the discharge in case #1 to be eligible for a discharge in case #2. It goes without saying that the minimum that will have to be paid is the value of the non-exempt assets, discharge or not.

If we sold the house, we'd probably have enough to clear about 75% of our total unsecured debt.

Probable a smart move. Pay the higher interest rate debt in full. For the remaining - make payments and/or negotiate settlements.

And, get rid of the new business. Dumb to try to keep as it is losing money - money neither you nor your wife can afford to lose. She needs to find a job, even if it is flipping hamburgers.

I realize the above posts and mine are hard on you and I do apologize for that. We are only trying to point out the obvious and sometimes it takes total strangers to do that. You need to take control of your financial success/destiny and the continuation of the path you describe is not going to help you.

Des.