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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2820
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I had to file a chap13 because of equity in house the payments

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I had to file a chap13 because of equity in house the payments are to much, I have struggled to make 4 mos of payments but now lost income. What happens if I cannot make payments? and how long does it take before I get notified?

Terry L. :

Hi and thank you for your question. In the future, you can request me to answer any further questions.

Terry L. :

You can bring a motion to modify your ch13 plan to lower the payments based on the change in income. This is possible if some creditors did not file claims. Otherwise, you can let the case get dismissed, and work out a loan modification with your lender.

Terry L. :

Once you fall behind on the trustee payments, it usually takes 2-3 months before any motion to dismiss. iF you are behind on the mortgage, they will file a motion to modify the automatic stay to take the house out of bankruptyc.

Customer :

Terry we are paying the mortgage, its not included in the 13 payment and we have tried a loan modification and It did not work. If the case gets dismissed what happens then?

Terry L. :

Well, you can look to refile if you have a positive change of circumstances..

Terry L. :

Since you have an equity based plan, conversion to chapter 7 isn't an option if you want to keep the home.

Terry L. :

You can look to refinance.

Terry L. :

any other questions?

Customer :

did you get my response?

Terry L. :

sorry, please repeat

Terry L. :

it did not come thru

Terry L. :


Customer says:

2:57 PM



Terry we are paying the mortgage, its not included in the 13 payment and we have tried a loan modification and It did not work. If the case gets dismissed what happens then?






Terry L. says:

2:59 PM



Well, you can look to refile if you have a positive change of circumstances..






3:00 PM



Since you have an equity based plan, conversion to chapter 7 isn't an option if you want to keep the home.






3:00 PM



You can look to refinance.






3:03 PM



any other questions?




 

Terry L. :

do you have any further questions?

Terry L. :

if so, please post and I'll answer. thanks

Customer :

What happens when and if they dismiss the plan? and can you send most of the payment?

Terry L. :

when you get a motion to dismiss, you have the right to cure the default.

Terry L. :

if you do not have it all, you can pay what you do, and ask for a small continuance to bring the payments current.

Terry L. and 2 other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 years ago.
Terry we will not be able to maintain the monthly plan because of job loss & no income.

When the chap 13 is dismissed, will all the creditors come back to collect? The collection activities go back to how it was? (having right to cure the default) means I will be able to negotiate with them on a possible payment plan?
If they won't negotiate then what?
They have the right to start collecting again, yes. You may want to consider entering into a consolidation (non-ch13) or work out repayment plans with them until the situation changes, where you can possibly refile the ch13.
Customer: replied 5 years ago.
what is a consolidation plan? will this lower payment? What is the worst that can happen?
there are companies that can work with your creditors to set you up on repayment plans, consolidating them with other debt and you make a monthly payment. They can often negotiate a lower balance, lower monthly payment, lower interest etc. (watch tax issues). Also, check with the better business bureau before you pay any company for this service, be sure it is a not-for-profit too.
Good luck.
Terry L. and 2 other Bankruptcy Law Specialists are ready to help you