I am recently divorced and due to hardship filed for chapter 13 bankruptcy. After 5 months of negotiations with the trustee; it has now become questionable if I am able to do the chapter 13 and still make monthly ends meet. Based on the latest proposal from the trustee; I would need to pay approximately 1000 per month to the court. Alimony and Child support are 2000 per month. I make net 4400 per month. Student loan debt is 565 per month. Long story short, I have 44 dollars per week to live off of after rent, electricity, heat, etc bills and above alimony, child support and chapter 13 plan. So, since the chapter 13 has not been agreed upon yet and confirmed; I am considering “pulling out of my chapter 13 plan” and go negotiate with creditors.
If I do this, I will have to negotiate approximately 20,000 dollars with unsecured debt to credit cards for a manageable payment. I also owe 25,000 on my truck (420 per month payment) that I will let go back to the bank; and will likely owe a deficiency of 8000 or so. And then I have a second house that will likely foreclose on. My concern is if I let the house foreclose; potentially I might have a large deficiency debt to contend with to the mortgage bank.
My thoughts are that if I pull out of the chapter 13 plan, I would use a consumer credit counseling or debt management company to negotiate with the credit card debt and truck deficiency for a reasonable repayment.
But, if there is a deficiency on the mortgage after foreclosure; and the mortgage company (Bank of America) is not willing to do a short sale; …….my question is
How is the repayment on a deficiency mortgage determined if a judgment is filed against me???? I tried calling Bank of America and they won’t talk to me as long as the bankruptcy filing is still in effect.
and do you see any other alternatives for me other than chapter 13 and not be able to make it each month or the above plan of negotiating and using credit counseling/debt management companies.
The first issue that comes to mind is why are you in a Chapter 13 bankruptcy? Is there a specific reason you did not opt for a Chapter 7 bankruptcy or did your bankruptcy attorney advise you otherwise?
Has your attorney or the trustee talked to you about a conversion to a Chapter 7?
It sounds like your goals may have changed from when you first entered your Chapter 13 bankruptcy, and possibly the payment as well. These factors may alter the path you select next.
A more perfect solution would be to include all your obligations, including the truck, and going for a quicker second chance.
But what are your goals now? You seem to be ready to put this all behind you are get a legal fresh start.
Please post your responses and follow-up messages to me on this in the comments section below.