Negotiating better mortgage terms?

[sleeplessinohio]

Hello all,

This forum has been a Godsend for me and my family. I'm hoping someone might be able to help me understand a couple of things.

My husband lost his job earlier this year. Our income has been reduced by about 60%. In order to survive, we have cut spending and stopped paying on unsecured debt. We are currently about 120 days behind on those payments. We are current on our mortgage and auto payments. For several reasons, we are hoping to delay filing bankruptcy until late next spring. Summer would even be better for us.

Right now, we are able to survive on the reduced wages, but it is really tough. If something else happened, there are no more corners to cut.

I'm deeply embarrassed to admit this but we have a subprime mortgage with Wells Fargo. I learned after signing that we qualified for much better rates, etc. In any case, I'd like to be able to negotiate better mortgage terms. But, I have questions.

1. If we stay current on our mortgage, is there any way to negotiate better terms?

2. If we have to be delinquent to get help with our mortgage, will this hurt our chances for Chapter 7 bankruptcy?

3. I am also concerned that if we ARE able to negotiate better terms for our mortgage that we would no longer qualify on the means test. Does anyone know if this could be a problem? Is it possible to negotiate better mortgage terms AFTER bankruptcy?

I have tried hard to figure out the means test on my own, but there are so many unknowns I have never been able to do it. For instance, our college aged daughter lives here, and I'm not sure if she will count as a family member or not. It seems this varies from district to district. With her, I think we pass the means test, without her, I'm just not sure.

Thanks for reading and thanks very much for any insight you might have. I hope you're having a Happy Thanksgiving today.

sleepless in ohio

[HHM]

1. So far, homeowners are finding it VERY DIFFICULT to get a modification while they are current on their mortgage. So, best of luck.

2. Yes, if your goal is to keep the house. To file chapter 7 AND keep the house, you must go into the chap 7 current on your mortgage. If you are willing to surrender the house, then a chapter 7 is ideal.

3. My guess, you have bigger problems. If you are on the border between 7 and 13, you need to consult with some attorney's and find out what your options really are given your ENTIRE circumstance.

Bottom line, you husand lost his job. You cannot support the same lifestyle you had with your job, and I venture to guess you were probably living beyond your means when he was employed

[Doghouse]

You are right about so many unknowns with doing the means test on your own. E.g I have about 2 yrs 7 mths left on my auto loan with a balance of $14,500. Monthly payments is $500/mth and that's what I used when I did the means test on my own. However, doing an official means test at my lawyers office, she told me the auto loan had to be divided by 60 month which is what it will cost me in a 5 yr plan. Now, that value of $242/mth is what I can use in the means test to see if I qualify for chapter 7 and not $500/mth like I thought. WTF????

Now I had to make up the extra $260/mth. Fortunately, I was let go at work and so a month or so of unemployment should drop my avg salary enough to make up the difference. Only time in my life that unemployment will actually be good for me.