Chapter 13 Help ASAP

I am sorry to hear that.

I don't understand how the agreed to pay way more than they can afford.

How long has it been since they filed for BK? If the BK has shown up on the credit reports, I thing getting a refinance mortgage if very doubtful.

Another option might be to file for CH 7 BK. What sate do they live in? How mutt equity is in the house?

 

Sorry to hear that. If they filed a CH 7 and got in to trouble again then either they had a lot of debt that was not dismissed in the CH 7 or they have problems budgeting.

They might benefit by purchasing a book or two on how to budget. Another alternative might be to seek free counseling at the National Consumer Credit Counseling Services (CCCS) 1-800-388-2227, http://www.nfcc.org.

OK, as to your original question I looked it up in NOLO's CH 13 BK book. If they have a job loss or serious debilitating illness, they can go to the court trustee and ask for the payments to be reduced. The other option id to have the BK 13 dismissed by the bankruptcy court but then they would have to deal with the mortgage company. How long they can be before the court gets upset I don't know. I would have them call a attorney that specializes in bankruptcy. They can pick one from the phone book.

 

iamsamiam,

You have to get approval from the BK Court for any refinancing. When you BK and until discharge, actually until the final report and accounting is issued, the court is in charge of your estate.

It is possible to refinance while in BK with approval, it depends on how long you've paid, the balances, and what is left -- it's not a sure thing, there are strict conditions.

If you want to refinance, DON'T miss a C13 payment, as that is one of the conditions. As a condition of the refi, your C13 plan would be paid off -- no way around that or the court that I know of.

Not likely you'll be able to refinance with a reporting C7 and an in progress C13, that's just plain overstepping ALL boundaries.

Even if you found a shyster predatory mortgage broker and lender, with scores in the 400's you're just screwed -- screwed on any rates, even for HOPEA loans and more importantly the terms as I'm guessing by your post there's no money there; can't make the same guess about any equity.

You can be late on a C13 payment, it's possible though not wise. Eventually, the Trustee will move to dismiss based on default -- likely 30 days, but there's no promises when you've signed over your financial life as a condition of getting the protections BK offers.

I think your best course of action would be to come clean with the attorney and a realistic budget.

The attorney could best advise on payment relief or reduction. Though I'm not sure with an attorney that put terms through like you are describing, and if attorney fees are contributing to the problem, how much help that would be. The attorney should have done the job right the first time or you should have found a more ethical attorney before filing.

I can't believe the plan was approved for those payments with the income stated -- something is hokey there. Unless that isn't the income that was provided to the court in the first place and if that's the case, I'm not sure you've any options at all.

If you make your C13 payment, you'd be in a better place to deal with the mortgage company. They'd write a letter to your attorney saying you missed a payment -- that's what would give you the most time and most protection.

Sassy

 

Call your BK attorney - tell him the deal and you need immediate options - but - you will be able to tack a pymt on the end of the Chap 13 - as long as papers are filerd and the Trustee says OK.

I imagine the Court would rather add one payment and interest to the end of the payment plan - than have you refinance.

Downey Fed Savings and Loan in LA lends to BK - but I do not know if they operate in OK.

They will most likely approve the extension - once.


aarff - dogman

 

iamsamiam,

I hope I didn't read judgmental of your friends, they've just had A LOT of BK's! I'm understanding, I had a heart attack and all the major lifestyle changes that go with it, that led to our filing C13.

The thing is, no matter the circumstances, the perception that goes with BK filings is that you are working the system. I don't personally think that's the majority of the BK filers but it's enough of them to get you labelled nonetheless. With so many filings, I'd think they are definately at risk of being looked at as abusive multi-filers -- they won't be accepted, if that's the case, then would be stuck with attorney's fees, all the BK reportings on the CR's, plus the mortgage company.

Ok, so mostly they are wanting to lose the attorney and his fees, yes? They're not happy with the reorganization and the way his fees translate into a monthly payment.

I don't know if dismissing would get rid of the attorney fees, though, I guess if they refiled they could then list the attorney.

If they don't make their plan payment, the Trustee will eventually dismiss. If they plan on refiling again, I think it would better to initiate the dismissal instead of the other way around.

They had a car repo'd in between the TWO C13 filings? that's in addition to the previous C7?

Without the BK, is their mortgage lender someone they could work a deal with -- move payments to the end, forebearance or something? I don't know, that could be scary, best to have all that in writing if they are willing to dismiss the BK for it. At least now they've the court to protect them from the mortgage company while late, as soon as dismissed, the mortgage company could move direct to foreclosure.

They could apply to an online lender for refinancing, eloan does it, to get an idea of what they may be able to qualify for, if anything. Their calculator is showing 8-ish percent for poor credit -- it doesn't say how low the scores can be.

I know there's some lenders that don't use any score, I just don't know how you would find them. When we refinanced in 2001, I was trying to get information -- there aren't a lot that will willingly share it either ;-).

The lowest score information I could find was 500, anything below that, don't even bother to apply with the loan sharks.

There is someone that posts here regularly that is in the mortgage business. Maybe someone else can post the name so you could put up a message direct and/or I'll surf some old threads and see if I can find him.

They are in a vulnerable spot for the financial leeches of the world -- they really need someone on their side! A predatory loan won't help them in the end and their medical problems aren't going away -- the BK filing cycle is just getting them in deeper and really isn't addressing their needs.

Are they old enough for AARP or anything with consumer advocates that would go to bat for them?

I'm thinking they may get the best advice from a housing counsellor. HUD has them in every state. At least they would be objective and be able to look at their entire picture, with the housing and hardship knowledge to know what's available to them as realistic options. Likely familiar with their existing lender too.

Their options will depend on if they already have FHA or any government backed lending in place -- they don't want to foreclose on you, unlike some of the princes of the subprime markets.

Sassy

 

iamsamiam,

It doesn't matter if she has the car or not, they still get the money difference between what the loan was and whatever they sold the car for, not usually even close to your loan amount.

Sassy

 

Sam,

Realistically, these folks have just run out of road. The math just won't work. Their income is $1400/month and they are going to re-fi and have a $100k mortgage at double digit rates. How will they make the mortgage payments as well as pay closing cost?
What needs to happen is the people who promised the bk trustee to take care of some of their expenses need to step up and do so. On a dismissal and a refile, that is the first thing the trustee will ask "what happened to the help everyone promised the court"?

I think sassy has the right idea. Start looking for assistance in housing because, I doubt these folks and their family have much credibility left with the bk court.

 

Oh My GOD!!!,

Where did it all go???

They should be millionaires. Every word I read about this situation makes it worse and worse.

Health issues aside, these folks need psychological attention.

 

Look, I'm only going by what you told me.

$200,000 a year for 30 years is $6,000,000. Living in a house with a payment of only about $1,000 a mo. leaves a LOT left over for investments.

Dead broke today. With even a bare bones minimum of a tax qualified investement plan they'd have $6-9 Million Dollars today, plus a paid off house. Not to mention executive health insurance, (that covers strokes) with disability coverage as well.

Don't come to this board expecting everyone to buy your assertion that they are good money managers.

You only embarrass yourself.

Other than feeling badly for their health problems, they've obviously been irresponsible for the last 30 years, and especially recently with this rediculous BK fiasco.

As a Financial Planner I deal with this abusive mismanagement of assets all the time.

Tuff if you don't like hearing the truth.

 

iamsamiam,

Butch dude can't piss off he's busy finding acorns and smooching! Besides, he shuffles beans around for a living -- doesn't count them, that would make him an accountant instead of a shuffler ;-).

He's seeing lost investment and retirement potential in their numbers.

You have to admit, fave Butch, most of us aren't as prudent in squirrelling away our acorns as we should be or when we should have been, yes?

Just what you described in your friend's life events, iamsamiam, is why we should all sit up and take notice, happens to a fair more than us than any of us could ever plan for. Life smacks, I call them.

Nonetheless, they are in a vulnerable spot, I'm with you they should be able to keep their house, and because they are vulnerable with health issues that aren't going away, I suggested HUD counselling.

It's a freebie provided by the government aimed at homeownership preservation. They should be able to qualify for some consideration just based on the health issues and equity.

HUD would know and more importantly would SHARE what is available that could truly help them in keeping their home without greed and profit-making motives.

The broker will be getting blurry-eyed thinking of his commission; the warehouse lender, seeing the equity and willing to help family's money all lining his pocket, will take their only investment potential remaining (shuffle shuffle) the equity, and then turn around and sell the loan as part of a pool to a real estate fund traded on wall street.

I pulled out my papers for you. I was late on a C13 payment, had a notice from the trustee in 10 days, I had thirty days from the date of the letter to make the payment and resume the plan payments on time. I never missed another payment so I don't know how many chances you get.

I was late making a mortgage payment. My attorney got a letter from the lender saying that deadbeat Sassy is too busy snorting and missed her payment and is now late. My attorney forwarded the letter to me saying take care of this between snorts will ya? I called the lender to let them know when I could next pay, done; called my attonrey told him I took care of.

Resumed snorting.

You've at least 30 days to help them get some good advice, I can tell you care about them. Help them find a program or some relief that will truly help them, not just this time, but for the rest of their lives so they won't be having financial stress on top of everything else.

Sassy

 

Butch dude,

There was a time in this country a mere few generations ago, when those that lived through the depression carried on their everyday affairs just as iamsamiam has described.

That is why I asked their age and whether qualifed for AARP or the like.

I understand it wasn't the best financial planning and that most people today really don't have mortgage burning parties because we do things differently, but we didn't live through the stock market crash, depression and war.

My grandparents were in this same boat. Born in Oklahoma, left for California with the dust bowl, couldn't join the war because he was too short ;-), owned his own business and homes by the sweat of his brow, and sweat he did!

Never rich, never poor -- don't think he regretted the way he lived his life and fed his family and took care of neighbors and grandkids.

One day has a stroke and there he sat in his wheelchair breathing but not knowing he was for the next 10 years.

Grandma who had always worked in their businesses with him went on food stamps and to work for someone else. Until her health was so bad she went to live with family, then to the nursing home.

The only thing she ever had was her paychecks and the paid for house -- that doesn't get you far when you're near retirement and with failing health.

I don't think it's the way any of us plan, or in these cases don't plan, our lives to end up, but it happens all the time just the same -- especially with generations previous to ours and I think you and I are about the same age.

Sassy

 

Here's a list of government sanctioned protection and advocacy agencies: http://www.hud.gov/fhe/protect.html

That's what they need, protection!

HUD counselling offices by state: http://www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm

www.hud.gov

There's also hud approved lenders.

How to avoid foreclosure:

http://www.hud.gov/foreclosure/index.cfm

Here we go: http://www.hud.gov/offices/hsg/sfh/econ/econ.cfm

If you have been laid off or are facing unemployment, you can keep your home - - if you know the right steps to take. The Department of Housing and Urban Development/Federal Housing Administration, the Department of Veterans Affairs, the Department of Labor and the mortgage industry have worked together to produce important basic information - - and key links to local groups and organizations - - that can help you get through difficult times without losing your home.

I read that they had a predatory loan already, 11%, eekkkkkkkkkk, that is worse than mine!

How long has it been since they got the mortgage?

You may be able to get a predatory lending advocate all of over their butts and have the loan re-worked or modified based on violations -- THAT would be optimal!

Sassy

 

This consumer law firm will review the loan docs for free and give you direction:

http://www.edcombs.com/FSL5CS/Custom/TOCViolations.asp

POTENTIAL CLAIMS YOU MIGHT HAVE

The following are claims that people commonly have, but don't realize. If any of these things apply to you, please call or send us copies of your papers. You may be entitled to recover substantial amounts of money.

I. CREDIT REPORTING PROBLEMS

Any type of inaccurate information on your credit report, whether resulting from identity theft, commingling of files, inaccurate reports by creditors, retention of obsolete information, etc.

We have frequently encountered instances in which credit reports were "pulled" by car dealers and other creditors without your permission or a permissible purpose. Substantial damages can be awarded for this.

If you cosign for someone else and do not receive money or property for doing so, the law entitles you to 15 daysâ?? written notice before any collection action is taken against you. Collection action includes putting the debt on your credit report or turning the debt over to a collection agency. Many creditors and debt collectors do not comply with this requirement.

If your debt has been discharged in a Chapter 7, and the debt is not reaffirmed, the creditor does not have the right to "pull" your credit report.

II. UNSOLICITED FAXES AND TELEMARKETING CALLS

We are looking for cases in which people received (1) pre-recorded telemarketing calls on residential phones (Echostar / Dish Network has reportedly been making such calls), (2) telemarketing calls or text message advertisements on cell phones (for which the recipient pays), or (3) unsolicited fax advertisements. All such calls violate the Telephone Consumer Protection Act. You may be entitled to recover money damages. We will need a copy of the fax.

III. COLLECTION LETTERS AND PRACTICES

You may have the right to recover money from collection agencies or lawyers who have contacted you regarding your debts.

Please send us copies of any collection letters.

Many debt collectors and collection lawyers routinely violate the Fair Debt Collection Practices Act. This is a Federal law which gives you certain rights and prohibits certain methods of attempting to collect debts. This may entitle you to recover any actual damages plus statutory damages of up to $1,000. Additional damages may be available under other state and federal laws.

Typical violations of the FDCPA include:

Adding unauthorized collection charges.

Threatening to report a debtor to the Internal Revenue Service if payment is not forthcoming.

Threatening criminal prosecution (mainly on bad checks).

Initial demand letters which insist on payment within less than 30 days or donâ??t state the exact amount of the debt.

Sending large numbers of letters purporting to come from attorneys or collection agencies when that is not the case.

Demands for attorney's fees prior to suit when contracts provide for fees only if suit is filed.

Changing the default date used to compute the seven year period a bad debt can remain on your credit report. A collection agency or bad debt buyer is required to use the same date as the original creditor. Often, they use a newer date, which allows the entry to remain on your credit report longer.

Attempting to collect credit card debts where interest is accrued at the (high) credit card agreement rate, but no monthly billing statements have been sent for a long period. The collector can be either the original creditor, a bad debt buyer, or a collection agency.

We are often willing to take FDCPA cases for the statutory attorney's fees.

IV. MORTGAGES

Your loan was transferred from one company to another and the new company began allocating more of your payment to interest if it was received within the grace period but after the first.

Mortgage companies have a statutory obligation to respond to complaints and requests for explanations of accounts. Often, they don't. This failure may entitle you to $1,000.

In a sale of real estate, the seller's lender charges a fee for recording the release of the mortgage, shown on the payoff statement. The title company also charges a fee for recording the release of the mortgage, shown on the HUD-1. One of the fees is fictitious, probably that charged by the lender.

You obtained an EquiCredit refinance loan from 2000-spring 2001 secured by 1-2 unit home in which you resided.

Some lenders have been paying money to borrowers' mortgage brokers to increase the interest rate, without proper disclosure. Look for references to "yield spread premium" or "YSP" or "premium" on the HUD-1.

Some lenders attempt to charge prepayment penalties or monthly late charges after they have placed a loan in foreclosure. Generally, this is not permissible.

Your loan is serviced by Fairbanks Capital or Olympus (formerly Calmco).

You have an adjustable rate mortgage (rate adjustments are often erroneous).

You are paying excessive interest (10% or more) or high fees and points (8% or more). (Not illegal in and of itself, but various special requirements apply, and often are not complied with.)

You were charged fees for document preparation.

You were charged recording fees in excess of the amounts disbursed to the Recorder.

You were charged a fee by a lender for drafting a payoff statement (prohibited by most recent loan documents).

Some mortgage companies fail to post payments the same day as received and then impose late charges.

V. CREDIT CARDS

We are interested in cases in which a credit card issuer promised a low rate on balance transfers and then raised the rate. Sometimes, the rate is raised after the portfolio is transferred to another company; we are interested in those cases as well.

VI. PAYDAY LOANS, TITLE LOANS

Many collection letters sent in connection with "payday loans" are illegal. Any threat to sue for treble damages under the Illinois bad check statute on a payday loan check is illegal. We believe that such threats are also improper in Indiana.

Most recently, instead of asking for treble damages, many payday lenders have taken to running the interest (at 500%) through the date of judgment. The problem is that many payday loan documents do not provide for anything of the sort.

VII. CARS

We are interested in insurance premium finance agreements that finance products other than insurance policies.

You were given a choice between a rebate and below-cost financing and took the financing (not the rebate).

You bought a car, signed financing papers, and the dealer later told you to come up with a larger down payment or sign a contract with different financing terms, refusing to allow you to cancel the deal. This is a very common practice. It is often illegal.

You bought a car with significant prior accident damage, or that was a rental car, and it was not disclosed to you. (We have seen many such cases; with increasing demand for used cars, dealers are tempted to do this.)

A car dealer decided to extend credit to less than all persons that applied for it and failed to give a written notice of credit denial. This often occurs when a car dealer first requests a cosigner on a transaction and then decides to extend credit only to the cosigner.

VIII. MEDICAL BILLS

You are being dunned for a balance allegedly remaining after an insurer or benefit plan paid the entire "reasonable and customary" charge (and the bill is for more than a deductible or copayment amount).

IX. LANDLORD-TENANT

Your security deposit was not returned promptly, with interest

We are looking for residential tenants whose landlords (or third parties hired by the landlord) bill them for utilities without individual metering. Many landlords violate Illinois law in that regard.