When letting go?

[Mark80]

My wife and I had a good long talk about our house situation last night. We are upside down, in an ARM and scared to death about the future. However the house payment was considered in our filing, and it was one of the big reasons we qualified for Chapter 7. I have yet to get any reaffirmation paperwork on it, so we didn't sign anything yet.

Mainly if I let the house go and rent, will that dump me out of a Chapter 7 plan? Same with letting any vehicles go? They qualify you with the means test and if I delete those items I drop to a Chapter 13.

I wasn't sure how that worked?

Thanks

[TEW]

You are talking about doing what I did.
When I filed I used the expenses for the house I kept up the payments until after I filed I did not reaffirm anything. I am now letting the house go and surrendering the car I held onto. Keep in mind when you file you have to look worse after the BK then you did before. This is all about planning and timing at my 341 I was only late I think it was 15 days on my mortgage.

[justbroke]

I wasn't sure how that worked?

After your 341 and discharge (and close)... it doesn't matter anymore.

[Mark80]

So your saying you have to be worse off after filing BK? I didn't understand that?

I am 2 weeks behind and filing wednesday so I figure my mortage holder will file a motion to speed up forclosure. So once Wednesday is over and I lose the house "before" discharge due to forclosure, what happens? Do they just proceed with the closing, or do you have to go back to court to redo everything including your means test ect?

I mean renting alone would eat up much of my extra money and we have to have a place to live. So I figured its not like all of a sudden we have 1800 a month in extra money!

[justbroke]

So your saying you have to be worse off after filing BK? I didn't understand that?

I am 2 weeks behind and filing wednesday so I figure my mortage holder will file a motion to speed up forclosure. So once Wednesday is over and I lose the house "before" discharge due to forclosure, what happens? Do they just proceed with the closing, or do you have to go back to court to redo everything including your means test ect?

I mean renting alone would eat up much of my extra money and we have to have a place to live. So I figured its not like all of a sudden we have 1800 a month in extra money!

If you're only two weeks behind on yoru mortgage payment... I don't think the mortgage company is going to speed up anything. Mortgage companies usually wait until day 90 to send a Notice of Defficiency (and opportunity to cure).

Then, under non-bankruptcy (State) law, they have to file a lawsuit (foreclosure) action in the appropriate court. Then you have 20-30 days to answer. Then...

So it varies by State. I think you have plenty of time. However, they could in fact file a Motion for Relief from Stay to pursue a foreclosure action. However, they have to follow the timeline of the non-bankruptcy court under State law.

(And this can even vary depending if it's a judicial or non-judicial -- power of sale -- process.)

IF YOU ARE GIVING UP THE HOUSE then stop paying! SAVE THE MONEY. And I do mean save it... don't spend it. You'll need it for your "extra" security deposit or months of rent you will be paying in advance on your new rental home. Stay in your home as long as you can, but be prepared to move.

I would say... start packing now. Pack 1-2 boxes a day. Just be prepared to go when they finally sell your home. You should know approximately when all that would happen and can start looking in earnest for a new place to live. Having wrote that, I would also add that you should start looking to figure the general availability and types of properties available in the area you want to live NOW.

Remember this model... Hope for the best. Plan for the worst!

[Mark80]

Good Points Justbroke, I am just more at ease knowing we can't be in the street next week and have some time to find a place. Now we just have to find someone who will work with our destroyed credit. I mentioned in another thread that I am going to meet with my Attorney on Dec 8th to lay all this out. Main factor for me is not to go to cheap and kick myself out of a Chapter 7!

Thanks for the help!

[justbroke]

Good Points Justbroke, I am just more at ease knowing we can't be in the street next week and have some time to find a place. Now we just have to find someone who will work with our destroyed credit. I mentioned in another thread that I am going to meet with my Attorney on Dec 8th to lay all this out. Main factor for me is not to go to cheap and kick myself out of a Chapter 7!

Thanks for the help!

You know what I learned through this whole process. You generally still own all the stuff you owned at filing... and well after filing!

I filed 4 months ago (going ton 5 months), and I still own a property I clearly intend to surrender. The Bank hasn't even made a motion for relief from stay! (I'm thinking they wait for Confirmation because my Plan indicates that the stay no longer encumbers properties which I listed as "surrender".) Then, after that, they still have to actually foreclose on it! (Although, that property is in a non-judicial State and the deed has a "power of sale" provision.) But still... it will be February or March before it's not MINE anymore!

It's a slow process.

[Mark80]

Something I forgot to ask, is it possible to negotiate the contract on a reaffirmation? Say I tell the mortgage company I will reaffirm, but only if certain terms are met or I walk, is there a chance something could be worked out?

I was thinking about either trying to get my principle lowered closer to market value, or having the rate lowered / locked long term?

Just a thought!