Expert: Terry Leeders - 1/3/2009

Question
Dear Mr. Leeders:  My husband and I filed chapter 13 in November of 2007.  We have a mortgage on our home, a mortgage on a 3 unit apartment building and we own another home outright.  Both mortgages are being paid by the trustee as we were behind.  We are considering letting the apartment building go as we have had a long string of bad renters.  If we can amend our chapter 13, how will this affect our case?  How much will it reduce our debt, etc? Is there a formula we can use to try evaluating this idea? We have approximately $10,000-15,000 in equity.  Will they allow us to do so and keep the other house that we owe nothing on?  Thanks for your help, MG in Ohio

Answer
You can file a modified plan to adjust your intentions on the home if you want to surrender it.  Your lawyer would then need to recalculate what your plan would be to cover the rest of the debts. This would be up to the court to approve, so could take about 30 days.  There is no simple calculation, as it is based on the claims filed in your case, your current income and expenses, asset protection etc, so call your lawyer to see what a potential savings could be.