We don't know if the courts will allow us enough money to live if we keep it. My husband has to pay for hotels in Ohio and gas there and back he comes home on the weekends. We would like to keep it. But not sure if that is the best bet. If we file chapter 7 and then can't keep up the payments the second mtg will always be after us, right?
We love it here, just not sure if court will factor everything in.
Response: Yes, that is correct.
Your other questions: I live in Michigan and need to file bankruptcy. My home is scheduled for foreclosure sale on September 28, 2011.
We are trying to decide which would be better a chapter 7 or a chapter 13. I have been told we qualify for either one. We have a first and a second mortgage and we are upside down on the our mortgage by about $70,000.00. The second mtg has turned us over to a collector instead of foreclosing. We have about $65000.00 in debt not including a parent plus loan (student loan for son) we owe about $9600.00, or the car we owe approx. $7800.00 or the second mtg we owe approx. $56000.00, and approx. $168,000.00 on first mtg. I have two judgements against me. I haven't had an income in a few years and my husbands plant closed but he is now working out of state, same company.
Also we had two other vehicles that were totaled in May in two separate accidents. One we were upside down on the other we used insurance money from to pay off difference on first and do repairs to the only vehicle we still have and pay bills. Do we have to count that $5400.00 we got from the car as income when filing bankruptcy and will it prevent us from being able to file?
Response 1: No and No.
If you want to keep the house, the only thing that can save the house from foreclosure now is to file for Chapter 13 bankruptcy and have the amount that you are behind put into a Chapter 13 plan. If you do not want to keep the house, but need extra time to find another place to live, you can file for Chapter 7 bankruptcy. Filing of bankruptcy would suspend the foreclosure sale.
You may be eligible to file for chapter 7 bankruptcy protection, if you meet the means test--the income test. If your income is equal to or less than the current income guidelines for your family size in your state, you would be eligible to file for a Chapter 7 bankruptcy all things being equal. The income used in calculating the means test is the income for the 6 months before the filing of the bankruptcy petition. In Chapter 7, if the Court grants you a discharge your debts will be wiped out. You would get a clean state, a fresh start.
The filling fee for Chapter 7 is $299.00.
You may be able to file a Chapter 13 if you have disposable income-extra income after your necessary expenses every month to fund a Chapter 13 plan and you must also meet the debt limit requirement. In order to file for Chapter 13 your unsecured debts must be less than $360,475.00 and secured debts must be less than $1,081,400.00. In Chapter 13, you prepare a payment plan and make payments to your creditors on 3 or 5-year plan. If your income is equal to or less than the current income guidelines for your household size in your state, you would do a 3 year plan. However, if your income is more than the current income guidelines for your family size in your state, you would do a 5 year plan. Your mortgage arrears and unsecured debts would be paid through the Chapter 13 plan.
The filing fee for Chapter 13 is $274.00
These are current income guidelines for the State of Michigan:
Household of one person $42,562.00
Household of two persons $50,738.00
Household of three persons $60,161.00
Household of four persons $71,758.00
Add $7,500.00 for additional individual
You must receive budget and credit counseling from an approved credit counseling agency and obtain a Certificate of Credit Counselling to be filed with his bankruptcy case. The agency will review possible options available to you in credit counseling and assist you in reviewing your budget. Different agencies provide the counseling in-person, by telephone, or over the Internet.
It is usually a good idea for you to meet with an attorney before you receive the required credit counseling. Unlike a credit counselor, who cannot give legal advice, an attorney can provide counseling on whether bankruptcy is the best option. If bankruptcy is not the right answer for you, a good attorney will offer a range of other suggestions. The attorney can also provide you with a list of approved credit counseling agencies, or you can check the website for the United States Trustee Program office at http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm
After your case is filed, you must complete an approved course in personal finances. This course will take approximately two hours to complete. Your attorney can give you a list of organizations that provide approved courses, or you can check the website for the United States Trustee Program office at http://www.usdoj.gov/ust/eo/bapcpa/ccde/de_approved.htm
Consult a local bankruptcy attorney for further explanations of your rights and responsibilities.
The sites below are good resources for finding bankruptcy attorneys in your area:
If you cannot afford an attorney, then the next best alternative will be to use bankruptcy petition preparer. Bankruptcy petition preparers prepare bankruptcy forms but they cannot give you legal advice because they are not attorneys. Click on the links below for some of the bankruptcy petition preparers. You can do some searches on Google or Yahoo if you do not like the ones on the links below.