Can I Start A New Or Redo A Ch. 13 Thats Already Confirmed?

Question:
Hello, I appreciate any help on this. Last week I had a confirmation hearing for a ch. 13, I have a huge payment because it includes one secured payment for a lien on a house, however, I am thinking of letting the house foreclose and stop making my chap 13 payments so the case will be dismissed. I want to know if the case gets dismissed and the house is gone, what will the credit card companies do? I have nearly 150k in credit card bills, will they take me to court? What if there is a judgement againt me by the CC companies, can I pay low monthly installments? Can I also try to settle with them, what will they take on the dollar? Or is it possible to do just another Ch. 13 just on the credit cards alone? Any input is very helpful.

Answer:
If you're going to let the house go, why do you need to stay in a Chapter 13? I'd probably recommend looking at converting to a Chapter 7. Speak with your attorney for more details. Your payment is based on several factors: 1. How much is necessary to pay your secured debt arrearages and priority debt in full; 2. How much is necessary to pay something towards your unsecured debt (typically 10% or so); and 3. How much "excess income" you have. You have to pay *all* (or at least most) of your excess income into the Plan, regardless of what the debt being repaid is. IOW, if your excess income is $2,062, letting the house go won't reduce your payment; it will only increase the distribution to your unsecured creditors or shorten the length of the Plan.





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