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My husband and I are at risk of being foreclosed on. Last spring we went to see a Lawyer and got some information on Chapter 13. He suggested we try one last time to get in a repayment program with out mortgage lender. They did that for us but the payments were so high that once again we fell behind and are now back with a foreclosure notice.

Does anyone know how the repayment program works for Chapter 13 if you sometimes make overtime and receive bonuses, tax returns, any extra income? I seem to remember the Lawyer saying that anything extra would go to the trustee and that was why I was so hesitant to do it. What happens if our car needs repairs or my husband gets a lot of overtime one week and we need a new refridgerator or the kids need glasses? Dont they just settle on a set amount every week and it comes right out of your paychech? I cannot imagine for the next 3 years never having an extra dollar to spare.
Thanks

Have you tried again to work something out with your lender? A few year they were not so quick to work with homeowners. But now, there inventory of foreclosed homes is so high, they really don't want your house. These foreclosed homes are not selling, and due to the fact that they are not being maintained, are costing the lenders a lot of money.

Have you explored all options with them? Extending you loan, which would lower your payments. Or refinancing at a lower interest rate. I have even heard of situations where the bank will take back the title, and then rent the home to you so it does not sit vacant. Then you can buy it back someday if you want. Make sure that when you speak to the lender, you are going up the ladder has high as you can go, to someone that has the most decision making power.

Hi Belle:)

We worked out a plan last spring and fell short the last 2 months. Now they started the process again. Its a very small town credit union and they arent very nice. The biggest problem here is that between our two mortgages we are paying out the nose for this house. The idea of the chapter 13 appeals to me so that we could catch up over time and start paying on some credit cards that we havent even been able to afford to pay at all for over a year. BUT, the idea of never having a spare penny for 3 years makes me sick to my stomach. Im just looking to find out if its really true that when you do a chapter 13 they take every last penny you make...overtime, bonuses, tax return? If that is the case than what happens if you have a really bad month and your car needs huge repairs or you child needs glasses (as mine does now), your washing machine breaks, your electric bill spikes up, Christmas? Im so confused and the bank has given us 30 days to pay 5100.00 as of this first notice.
Thanks

I'd consider 3 years to be a short period of time. Some of us haven't had a vacation or a spare nickel for over a decade.

I don't know the answer. I suppose if you make the commitment for a payment plan under chap 13, you pay that amount. I am not sure that they take all 'extra', as that doesn't sound right somehow. I think you make a $ monthly payment, and that's it, but I am not sure how it works.

About the mortgage, is there away to move your loan to another lender and refinance?

Michelle,

From my recent experience (just filed in KY sorry to say), the amount you pay the trustee is set until the end of your 3 years unless they see from your tax returns that you're now making $20000 more than you were last year. If you get a refund on your taxes during the 3 years of paying the trustee, then they take that money and give it to your creditors. Our lawyer told us to fix our W-4s so that we won't get a refund.

According to our plan, if we needed to make a major purchase such as a refrigerator, we have to let them know.

They are supposed to set your payment to an amount that you can afford. To derive the amount we could afford they took our income minus our house payment, utilities, medical bills (they expect you to have to go to the dr or get glasses), transportation, entertainment, etc.

They let us stretch our payments out over the max of 5 years.

I originally didn't put an amount down for entertainment and the lawyer made me. He said that they don't expect you to not let your kids go to a movie every now and then or to participate in sports etc.

It was kind of nice that they wanted us to be able to do fun things, sucked that we had to file though.

Hope this helps.