I fell behind on my Chapter 13 payments. I have a settlement date on my house in 3 weeks..what should I do?

I fell behind on my Chapter 13 payments. I have a settlement date on my house in 3 weeks..what should I do?

I filed for chpt.13 in Nov 2006. I am paying a 1500.00 mortgage, and a 1400.00 payment on the Chpt. 13 repayment plan. I have had tremendous trouble keeping up with the trustee payments.My Bankruptcy lawyer contacted me and said the trustee is going to close my case on monday unless I pay a back fee of 4500.00. Needless to say I dont have the money. I have a house on the market and a closing date of Sept 14th. The lawyer suggested that I let the trustee close the case and go to settlement on the set date to save me some money. My question is I have a vehicle and back taxes in the Chpt.13 plan. How does that factor in after the sale of the house? The lawyer suggests getting a tax attorney for the back taxes I owe. So what about the car? Also, since the trustee is going to drop the plan on Monday, what does this mean in terms of my credit and how it is reflected on my credit report. Is it still reflected as an open bankruptsy? Also, what about the money i paid into the plan? Help!

The Answer : I am not a lawyer but I have dealt with a lot of people who went through bankruptcies. I am confused by your case...and I wonder if your lawyer knows what he's doing.You do NOT want your bankruptcy dismissed for several reasons.1) The very first people to get paid through the "plan" are the lawyer and trustee. If you are dismissed, you may have to file all over again, and you get to pay all those fees again! What a waste!2) You have to pay the IRS no matter what! If you do it through your bankruptcy, you will not have to pay the penalty and interest. If your BK is dismissed, the IRS gets to tack on all of the past interest/penalties and come after you all over again.3) None of your other creditors have been paid yet. Once dismissed, you can bet they will be going straight to court and file for a judgment....and move as quickly as they can before you can file for another bankruptcy in 6 months.So allowing your bankruptcy to be dismissed is going to have a devastating effect on your finances. You say you are selling your home? It closes in just a few weeks? Will there be money left after the sale to cover your past due amount to the trustee? If so, your attorney needs to convince the trustee to grant a deferment for one more month. Then pay off the balance and continue with your bankruptcy.If the trustee won't work with you, file a motion with the court. The judge may see things differently. Many of the BK trustees are absolute jerks who are letting the power get to their head. If you have a clear path to repay this, it's not reasonable for the trustee to dismiss it! As to the rest of your question....the sale of the house won't effect the BK because they will be dismissing it. You may need that tax attorney to fight off the IRS. If you keep up the payments on the car they won't go after it. The car was reaffirmed with your bankruptcy and the payments were being handled...but with the dismissal everything starts over again. You are behind on the payments, but you can work something out with the collectors.The bankruptcy will appear on your credit reports as dismissed. It will still be a bad mark, and will stay there for the entire 7 year reporting period that began when you filed the BK.The money that you have in your plan has already been distributed in this order: 1) Your lawyer 2) The trustee 3) the IRS 4) secured creditors (your car). I'm betting they haven't paid off beyond these people.Again, it sounds like your attorney is dropping the ball. If you are not getting good answers, consider a new attorney.