newbie

[californiamama]

Hi, my husband and i filed for bk this year we also had another property already in the process of foreclosure.

It started after we bought a SFR in September, we thought we would be able to sell our condo but it didnt happen, we were caught right at the time when the market started slowing down. We eventually decided to just give one up. We decided to give up the condo ( lower mortgage payments) anyway, we have owned our sfr for a year and value is still the same we want to buy out next year after the 2 yrs have passed but fear that we wont have the equity to buy out the bk.

We were thinking what will happen if we give up our SFR too...or should we wait and see if we are able to sell our property next september. My concern is, we dont want to keep on paying 3200 in mortgage payments if we will lose the house next year. why do we think we will lose the house? because our interest will change next year and we might not be able to afford the mortgage payments then end up foreclosing again. what would you guys do if you were in my situation.

[SinkingFast]

I gotta ask. What does SFR mean??

As far as the mortgage adjusting,............ You can always amend your Ch 13 payment plan to allow for an increase in your Mortgage payments. If the rate adjusts upward, you could petition the Trustee to proportionally lower your BK Plan payments.

[lrprn]

Tough position, CAmama...especially with the housing market crashing even as we speak. Unless you can ride your house through the sales downturn plus ride the increase in your APR, you're right....you'll just be throwing good money away and still lose the house. Do you know how much your payment might increase next year?

SinkingFast gave you some good advice - you can ask your lawyer to file an amendment your plan if the payment goes up significantly.

Sounds like you will end up deciding if you want to sacrifice everything for this house or not. What does your lawyer advise?

I gotta ask. What does SFR mean??

SF, I think SFR = single family residence.

[californiamama]

yes SFR means single family residence.

I'm not sure how much my rate will change to. The only thing i know is that right now we are already suffering , what more if it increases in sept 06? I dont know of any mortgage lender who will do 100% bk buyout. I dont really like my attorney, if i could fire him now, i would, i just dont want to pay another 2500 and start over...

What would you guys do if you were in my shoes though?

[SinkingFast]

Tough choice CA Mama!

I can easily say let the house go. That's what we did. But not by choice. Hubby lost his job. When he found a new position, it was outa state and we HAD to move. Looking back, that house was eating us alive. Driving our debt.

But when you're living in it. When it's home and you're still there, it's tough to just chuck and run. I can see that.

BassBoy posted the other day that his Foreclosure Sale has been scheduled for Jan '07. That post brought back a flood of memories and emotions associated with our "HOME". It made for a tough day as we had just filed BK ourselves.

If you can step back, and look at it analytically, and say "Yes. This mortgage payment and the expenses are choking us to death." Then maybe the thing to do is walk and not look back.

[californiamama]

yeah i think we are 60/40 in favor of giving it up. I just dont want the trustee to take the all of our extra income. like if were paying 3200 and move to a house and pay 2000 , are they taking the 1200 remaining? my lawyer says we can ammend the plan but i dont really believe him....

[EmmaT]

Can't you move back into the condo and give up the house? Wouldn't you be able to stop the foreclosure on the condo by filing BK? Didn't you say that the mortgage payment on the condo is lower? Just a thought.

[lrprn]

yeah i think we are 60/40 in favor of giving it up. I just dont want the trustee to take the all of our extra income. like if were paying 3200 and move to a house and pay 2000 , are they taking the 1200 remaining? my lawyer says we can ammend the plan but i dont really believe him....

If you file keeping the house, the monthly payments will significantly impact your Means Test calculations by lowering your disposable income because of the monthly house payment plus upkeep costs, property taxes, etc. If you let the house go, then yes, any extra dollars saved will go back into the Means Test to likely increase your disposable income and therefore likely increase the monthly payments to your trustee as well.

Your lawyer is right - your plan can be amended after filing if your financial circumstances change so you can't make your payments to the trustee on time.

Have you investigated renting out your condo to get some income flowing from it until it sells? Just trying to brainstorm to see if there are ways to provide some immediate relief to help you plan for your bk better.

[californiamama]

i thought about that - giving up my house instead of the condo. we thought about it after we were already 5 months behind on the mortgage pmts. I put in on the market in January 2006 and took it off in June because even if i sold it i would still end up having to pay 30k out of pocket. So i was screwed either way.

I see the point though about losing all the extra money i would be saving to the trustee anyway. I guess i'll just have to give this a shot. There are 2 things that can happen to save me from this bk. one i can sell the house in september or for as long as i can afford my monthly payments or refinance if i find a lender who will do my loan bk buyout 100%loan to value w/ a history of foreclosure......