QUESTION
What happens to my overage if I dismiss my chapter 13? Can I keep my house and my car?
Asked on May 24th, 2013 on Bankruptcy - Arizona
More details to this question:
I have been in my Chapter 13 for almost 3 years of my 5 year plan. August will start my 3rd year. I lost my job, but am waiting for unemployment to start and my wife has some income coming in. I believe it would benefit me to have my Chapter 13 dismiss but I'm not sure. My reasons are because my house loan is now current and because I have overage from - 1.) My 2nd mortgage of $16,000+ was erased thanks to the courts deciding it was a predatory loan. 2.) A pay off of my car loan of $8,000+ after it was wrecked. I was told by my trustee that I would receive the overage after I complete my Chapter 13. What if I allow the Chapter 13 to get dismissed- what happens to that overage? From what I'm reading, as long as my home is current, I can keep the home after being dismissed from my Chapter 13 if I continue to make my loan payments as I did before my Chapter 13 I would also like to keep my truck, which I think I can make out a deal to re-pay them, it's an older truck and I can afford the payments.
2 ANSWERS
Deborah F. Bowinski
You are certainly free to dismiss your chapter 13 if you wish to. Unfortunately, only your attorney has sufficient information about your case to help you determine whether that is a good idea or not. If your mortgage payments are current and there are no arrears left to be cured through your plan the you would be able to keep your house. The same would be true of any vehicle loans you have. If you were cramming down on a vehicle loan be mindful that the loan on such a vehicle will be seriously past due and you could lose it if your case is dismissed. Also keep in mind that whatever funds have been paid to the trustee (from any source) will almost certainly be distributed in accordance with your confirmed plan rather than be refunded to you. I don't quite understand what you mean by "overage" so I am unable to answer that. You really need to seek advice from your attorney.
Answered on May 28th, 2013 at 2:54 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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We cannot answer your questions because you are represented by an attorney. If you do not trust your own attorney's advice then you should see the counsel of a very experienced chapter 13 attorney.
Answered on May 28th, 2013 at 11:39 AM