How to get rid of a house??

[goingout]

IF we decide we don't want the house anymore, what are the ways to go about getting rid of it.

1. Would we just include the mortage in the bankruptcy and not reaffirm that debt?

2. Would be stop paying on the mortgage first and then file bankruptcy and it would all be taken care of that way?

3. Could we give the house back to the bank somehow?

What would be the smartest, neatest way of going about it? I really don't want it to sit empty forever, out of respect for our neighbors I guess. I'd prefer for it to get back on the market the quickest possible. At the same time, I'd like plenty of time to find a rental of my choice. We have kids so, I want to move into a rental once and be happy there for a number of years. I want to minimize moves, school and daycare changes on them.

Advice appreciated.

[Stilltheone]

IF we decide we don't want the house anymore, what are the ways to go about getting rid of it.

1. Would we just include the mortage in the bankruptcy and not reaffirm that debt?

2. Would be stop paying on the mortgage first and then file bankruptcy and it would all be taken care of that way?

3. Could we give the house back to the bank somehow?

What would be the smartest, neatest way of going about it? I really don't want it to sit empty forever, out of respect for our neighbors I guess. I'd prefer for it to get back on the market the quickest possible. At the same time, I'd like plenty of time to find a rental of my choice. We have kids so, I want to move into a rental once and be happy there for a number of years. I want to minimize moves, school and daycare changes on them.

Advice appreciated.

Stop making payments.

Seriously, you can not pay it and the bank will foreclose on it. Sell it or call the bank and surrender it. There are many choices.

We never reaffirmed our mortgages in our bankruptcy, just kept making payments.

Good luck!

[goingout]

We can pay it, but with great difficulty. We cannot sell it, it is morgaged at 100%, likely more since the drop in the market.

If we decide to reaffirm, it will help us to continue to make the payments. But, I am questioning whether we want to. We will still be paying more than we should based on our income. I'm thinking it might be smarter, finacially, to let it go and start over saving for a downpayment with an eye for something more reasonable in the future.

I am concerned that if we reaffirm and then continue to have financial difficulties, then what?

A good portion of DH's income is commision. This makes me nervous.

[Martha13]

Hi, I just wanted to post to say I feel your pain, and you're not alone We are currently going thru that same decision process, for similar reasons as yours, and have pretty much come to the conclusion that letting it go is the best decision overall. Not the easiest, prettiest, most private way to go--but in the long run, the best. We have gone the loan mod route with our lender just to cover all bases, and that's moving thru their pipeline right now, but we have decided to stop paying the mortgage and hold on to those hard-earned $$ now to go towards moving expenses.

I'm still not sure which way is easiest--short sale, foreclosure, whatever, but I'm not sure at this point I even care. I swear, once we HONESTLY sat down and looked at the whole picture, it just seemed clear to cut bait, so to speak. Just like you--we feel we can make the payments, but by no means easily, and the market is very scary. If you can, search the forum for the article someone posted on surviving the great depression of 08-09. Maybe someone can post a link for you--I'm a bit challenged there That article made a big impact on me...it might help you too. Hang in there!

[Help!]

I think any payment that presents a "great difficulty" is going to become an even greater difficulty as the cost of fuel, food and goods goes up. If you reaffirm and can't keep up you'll really be in a bind. If you feel nervousness about DH's income, I'd play it safe and let it go.

[goingout]

http://www.bkforum.com/showthread.php?t=25466

Stay in the house as long as you can. Fight the foreclosure at every turn. Doing the 'right thing' by paying your bills until you go broke and lose everything anyway is not good economic sense for you and your family. If you continue to try to keep up you will not only lose the house but you will be destitute and heading towards homelessness. Pride destroys finances.

.

The bank is overwhelmed with properties. Law forbids them from owning too much property. Due to this, the foreclosure could be pushed off for a long time. .

These methods, depending on the lender could give you 2 years or more in your house with no payments. Do not go bankrupt until the month your house is going to foreclosure sale. This will give you an additional three months. Even more if you can work something out with the attorney to delay the proceedings. That is at least 3 more months of living free. Watch excessive spening on cards or huge items going back 12 months before bankruptcy. Hide your cash.

Ugh. DH would never go for that route. I don't think I want to either. I want it to be like ripping off a bandaid, quick and over with. Do we just not reaffirm then? If we do that how long do we have to find a rental and get out.

I want to plan this right.

[Martha13]

I'm not doing any of those things either, other than (probably) letting it go, but I think the article just made me feel better. I'm afraid there's not much of a bandaid approach, at least that I'm aware of, for getting rid of a home these days...But getting the decision made is sure 1/2 the battle. We also want to minimize the moving, etc, because of our kids, so I understand how you feel. We are researching rentals/leases now. Good luck.

[goingout]

I think any payment that presents a "great difficulty" is going to become an even greater difficulty as the cost of fuel, food and goods goes up. If you reaffirm and can't keep up you'll really be in a bind. If you feel nervousness about DH's income, I'd play it safe and let it go.

Help!, can you explain to me how exactly I would be in a bind? What would happen if we found we couldn't keep up? Could we amend the bankruptcy or something? They put a lien on the house...then what... we can never sell... then any equity automatically goes to the bank or something....I have no idea....

I need to know so I can make a case to DH.

[keepmine]

Help!, can you explain to me how exactly I would be in a bind? What would happen if we found we couldn't keep up? Could we amend the bankruptcy or something? They put a lien on the house...then what... we can never sell... then any equity automatically goes to the bank or something....I have no idea....

I need to know so I can make a case to DH.

If you reaffirm, you are squarwly on the jook for the mortgage bakance should you default at a later date. The lemder could then sue you for any deficiency balance after foreclosure. {if that's allowed inyour state of course}.
If you don't reaffirm, you can walk away at any time owing nothing.

[Help!]

Help!, can you explain to me how exactly I would be in a bind? What would happen if we found we couldn't keep up? Could we amend the bankruptcy or something? They put a lien on the house...then what... we can never sell... then any equity automatically goes to the bank or something....I have no idea....

I need to know so I can make a case to DH.

Not sure if you're thinking of filing 7 or 13, but here's a hypothetical. Let's say you qualify for 7, discharge all your unsecured debt and keep the mortgage(s) on the house (assuming you don't have more equity in it than you can exempt on your petition). You have a reasonably comfortable budget with $300 left over each month. One unexpected car repair, a $0.50 increase in the cost of gas, a 20% increase in heating costs (which is what they're predicting), a broken water heater, etc. happens. Unless you have something set aside for these expenses, you suddenly can't make make ends meet and make the mortgage payment at the same time. There are no credit cards for backup, no savings, no options and you can't file Ch. 7 again. You are in a bind.

Another hypothetical... you file Ch. 13 and have an established payment plan. You continue to make those mortgage payments but similar unexpected expenses pop up. Again... no way to cover them since you can't stash money into a savings account. You could amend your 13 plan, convert to a 7, but it will take time (and probably money you don't have) to make the change. There will be documents to file, hearings to attend, headaches... In the meantime, you are on the hook for the agreed upon payment to the trustee. If for some reason you can't make the payment to the trustee, you risk being dismissed. You are in a bind.

Unless you can keep the mortgage with plenty of breathing room after filing Ch. 7, I'd let it go. If you file Ch. 13, the amount of breathing room you have will be dictated by your plan (and it is guaranteed to be minimal).

I don't know all of your circumstances, but that breathing room (at least to me) is much more important than keeping the house. Just my opinion...

[Martha13]

I don't know all of your circumstances, but that breathing room (at least to me) is much more important than keeping the house. Just my opinion...[/QUOTE]

RIGHT ON, HELP!!

[diviaruba]

Help!, can you explain to me how exactly I would be in a bind? What would happen if we found we couldn't keep up? Could we amend the bankruptcy or something? They put a lien on the house...then what... we can never sell... then any equity automatically goes to the bank or something....I have no idea....

I need to know so I can make a case to DH.

Here's was my response to someone else considering re-affirmation on a house:

Re-affirmations are legally binding agreements, executed inside of bankruptcy proceedings, and must be signed off on by your attorney or approved by a judge. If you choose to reaffirm, you agree to be legally obligated to pay the debt despite bankruptcy. If you reaffirm, the debt is not canceled by bankruptcy, and is non-dischargeable in any future bankruptcy proceedings. It is a serious business, therefore it has to be made before your bankruptcy is over, while you still have the protection of the court, as well as the ability to rescind the agreement before discharge and closing.

[goingout]

This is good information. So, it should depend on how much breathing room we have, which means budget.

Another hypothetical... you file Ch. 13 and have an established payment plan. You continue to make those mortgage payments but similar unexpected expenses pop up. Again... no way to cover them since you can't stash money into a savings account. You could amend your 13 plan, convert to a 7, but it will take time (and probably money you don't have) to make the change. There will be documents to file, hearings to attend, headaches... In the meantime, you are on the hook for the agreed upon payment to the trustee. If for some reason you can't make the payment to the trustee, you risk being dismissed. You are in a bind.

Is there anything that says you can't save up cash when you've started the ch 13 payment plan, or are you just saying it will be designed so that you won't be able to?

Why do I keep reading that most people who file bankruptcy don't loose their homes? From what you all are saying, it seems like the cards are going to be stacked against you to loose your home.

[keepmine]

This is good information. So, it should depend on how much breathing room we have, which means budget.



Is there anything that says you can't save up cash when you've started the ch 13 payment plan, or are you just saying it will be designed so that you won't be able to?

Why do I keep reading that most people who file bankruptcy don't loose their homes? From what you all are saying, it seems like the cards are going to be stacked against you to loose your home.

Another factor is, do you have any equity in the house? If not-let it go. You don't want to drag something through bk with negative equity.
The cards are stacked against you if, you have not fixed the issues that created the bk and are unable to afford the mortgage payments post bk.

[truckerswife]

ok. so if we filed 13 and included past due mortgage payments but decide we want them to take the house, what can we do? we did not reaffirm and are behind on the mortgage for the past 7 months since the bankruptcy. we were in foreclosure when we filed 13. but with repairs and rising prices (and a mortgage increase of $200 a month) we can not afford it. We have heard nothing from the mortgage companies. we had a 80/20 mortgage and are very upside down on the loan to the tune of about $15,000. We paid $5000 to the mortgage companies through our plan and are scheduled to pay another $6500 to them through the plan. We are supposed to be done with the plan in about a year and a half.