Comments on: How Will Chapter 13 Bankruptcy Help Us if We Can’t Afford the Payment? – Michele

By: Annie

Annie — Fri, 17 Dec 2010 16:06:26 +0000

Dear Steve,
I found your website via looking for questions related to Trustee payments to high to pay, Like Michele we are in a Bankruptcy Chapter 13 where I just found out that our payment will go up even after a loss of income. When we first filed in Dec. 2010 I had already lost my job and was collecting unemployment. We had our home which unlike Michele had and has a negative equity of $168,000 dollars, on the first filling we wanted to keep our house and our mortgage was $3000 a month. I was hopeful to find a job but nothing came and still nothing has. I decided to go back to school and hopefully get a new job with a new career. After talking to our attorneys of our fears he advised us to let the first case dismiss and re-file to include the house as there was no equity in it to help out. In addition, I had a huge income and to help us out a bit, we waited six months so that unemployment and not my old income would be accounted for. So, from the first filing our payment was $1896 a month, plus we had the Mortgage of $3000 a month. Now with the second filing our payment went up to $2729.00 and we were lucky to find a rental $1495.00 a month. My husband’s combined income is 6038.00 net which includes his job and his 26 year Military retirement. I was collecting roughly $1700.00 a month from unemployment. With only a family of four, our incomes put us above the “Means Test” forcing us to file for 13. But our combined debt including the house now exceeds $500,000 dollars, including the old mortgage, credit cards, cars and unfortunately some taxes. We tried to do a Short Sale, but the bank denied it and proceeded to foreclose. It’s been hard for us to try to make the 2729.00 payment especially when our cars which we decided to keep now decide to break down on us and we have two kids in “public” but charter art schools and I am trying to pay for school little by little. We live in Salt Lake City, UT and I know the laws are different in each state. As of this month, my unemployment benefits have completely exhausted and instead of our payment of 2729.00 going down it has actually gone up to 4815.00! Apparently the trustee assumes my husband got a raise which he did not and has also been in a pay freeze for the past two years. In addition our original allowed expenses or “schedule j” were reduced without us knowing and is their additional basis for the payment going up. But my question is when a Trustee increases your payment and you simply cannot afford it, what options does the consumer have? Especially with a property which was given up and so much back debt? Unfortunately at this time if we canâ€™t fight this new payment increase, we will have to let this BK dismiss as well because we canâ€™t simply afford it. How do they expect for us to pay 4815.00 a month and still expense rent, (which will go up to 1890), food, gas, utilities, car expenses and basic living expenses on a $6038.00 net income? Your advice would be greatly appreciated!
Sincerely Annie

By: Annie

Annie — Fri, 17 Dec 2010 16:06:00 +0000

Dear Steve,
I found your website via looking for questions related to Trustee payments to high to pay, Like Michele we are in a Bankruptcy Chapter 13 where I just found out that our payment will go up even after a loss of income. When we first filed in Dec. 2010 I had already lost my job and was collecting unemployment. We had our home which unlike Michele had and has a negative equity of $168,000 dollars, on the first filling we wanted to keep our house and our mortgage was $3000 a month. I was hopeful to find a job but nothing came and still nothing has. I decided to go back to school and hopefully get a new job with a new career. After talking to our attorneys of our fears he advised us to let the first case dismiss and re-file to include the house as there was no equity in it to help out. In addition, I had a huge income and to help us out a bit, we waited six months so that unemployment and not my old income would be accounted for. So, from the first filing our payment was $1896 a month, plus we had the Mortgage of $3000 a month. Now with the second filing our payment went up to $2729.00 and we were lucky to find a rental $1495.00 a month. My husband’s combined income is 6038.00 net which includes his job and his 26 year Military retirement. I was collecting roughly $1700.00 a month from unemployment. With only a family of four, our incomes put us above the “Means Test” forcing us to file for 13. But our combined debt including the house now exceeds $500,000 dollars, including the old mortgage, credit cards, cars and unfortunately some taxes. We tried to do a Short Sale, but the bank denied it and proceeded to foreclose. It’s been hard for us to try to make the 2729.00 payment especially when our cars which we decided to keep now decide to break down on us and we have two kids in “public” but charter art schools and I am trying to pay for school little by little. We live in Salt Lake City, UT and I know the laws are different in each state. As of this month, my unemployment benefits have completely exhausted and instead of our payment of 2729.00 going down it has actually gone up to 4815.00! Apparently the trustee assumes my husband got a raise which he did not and has also been in a pay freeze for the past two years. In addition our original allowed expenses or “schedule j” were reduced without us knowing and is their additional basis for the payment going up. But my question is when a Trustee increases your payment and you simply cannot afford it, what options does the consumer have? Especially with a property which was given up and so much back debt? Unfortunately at this time if we can’t fight this new payment increase, we will have to let this BK dismiss as well because we can’t simply afford it. How do they expect for us to pay 4815.00 a month and still expense rent, (which will go up to 1890), food, gas, utilities, car expenses and basic living expenses on a $6038.00 net income? Your advice would be greatly appreciated!
Sincerely Annie