We have equity in our home, more then what is owed in unsecured debt. We are considering filing Chapter 13 bankruptcy but can not aford the estimated trustee payment of $2700. If we file we will be unable to pay our monthly expenses and the trustee, combined are near $8700. The debt is 160,000 and the equity is 200,000. If we could use the equity to pay off the debt we would but we can’t get refinanced.
How is bankruptcy, Chapter 13 protecting us if we can’t afford the trustee payment and we could end up losing our home in the end.
It doesn’t sound like it will help you then. You should not enter a Chapter 13 plan doomed for failure. It will be discharged and just be expensive and fruitless.
Frankly, it seems like some of the underlying factors here are going to have to change to lower your debt or living expenses. Rather than live in the house and try to overcome your debt you might just have to sell the house quickly and use your equity to pay off your debt. If you don’t then there is the possibility your creditors may sue you when you default on the debt you can’t afford and then they may go for a wage garnishment or a property lien or some combination of both.
There is no guaranty of being able to refinance but there is a guarantee of repayment of money borrowed under that law unless it is terminated by bankruptcy or the satisfaction of the debt.
Equity unable to be accessed is paper money, not real currency.