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    Behind on mortgage and want to keep house

    Hi! We were recently told that we passed the means test to file a chapter 7. We plan to file either a 7 or 13 in October. Here is part of the story and any advice would be helpful. Our 1st mortgage balance is $488K and 6 months late (value is way under this - in the $300's). We were served on 7/31/2012 and given a hearing date at the end of November. (Filing in October.) We want to keep the house. My attorney thinks we may have trouble funding a plan in a Chapter 13. My idea (worst case scenario) is to take a hardship withdrawal on our 401K if we can't get a modification prior to losing our house in foreclosure. And yes, I know walking away makes the most sense, being that we are under water, but we have 4 kids and 3 dogs and do NOT want to rent in this situation. Way too complicated, and we love our house. We also have a 2nd and 3rd mortgage, and we'd like to try to get settlements on those after the discharge. Does any of this sound "doable" or are we gambling way too much? I'm afraid of trying to do a Chapter 13 if I'm setting myself up to fail. Does anyone out there have any thoughts on this? Thanks!

    #2
    have you tried for a loan modification? by the sounds of it, you may have too much income.

    i understand you love your house. we did also for over 30 years and it was indeed so difficult at first to leave it. also, we didn't have the complexities of having children and animals in tow. while i love my kids, i was thankful they were grown when this happened to us, so i totally understand where you are coming from.

    i hate to say this, but unfortunately you may have to start changing your mind set. it really sounds with your home having a 1, 2, and 3rd on it, that is really effecting your total financial stability. a home really is where the heart is, also with all your memories, not the four walls surrounding you. i know it's so difficult to think about moving, but it may be your only way out of this financial situation especially in light of the fact you are 6 months behind.

    i would NOT take your retirement money since it is one of the only things that can out live a bk and be completely protected. you may be throwing good money after bad. it's hard to think with your mind and not ones heart when you are in a situation like you are, but you really need to sit down and see if this can really and truly be the best for your family's future. i know, i'm not much help, but i wish you the best of luck with which ever decision you make.
    8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

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      #3
      You have become way too emotionally attached to your (severely underwater) house, that you have lost sight of what's really important here. Home is a place to sleep at night and store your stuff. That's it. You should not allow yourself to become so emotionally attached to a building and land--which can be easily replaced--that you raid your retirement funds, and probably still end up losing the house to foreclosure anyways. What you should be doing is to quit paying ALL mortgages on the property, filing modification requests in order to drag out the foreclosure for as long as possible, and saving the money that you're NOT paying to the mortgage bank(s) to cover moving expenses and deposits for a rental.

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        #4
        I agree with what has been said. Does your housepayments taxes and insurance total more than 25% of your income? If so you wasting your time and money keeping the house. You cannot afford this home. It is hard to let go, I know we are letting our home go.
        A bankruptcy is suppose to get you a freshstart. You need to take full advantage of it ,
        chpt 7 ,5-2009

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          #5
          I know our house is underwater. But with the Chapter 7, we can afford our house payments which will be about 22% of our income. We just need to get it current (hence the hardship withdrawal idea as worst case). We've tried for a modification in the past, which is why the payments are behind to begin with. Our attorney is hoping to get a modification after the discharge and also told me to stop worrying about the 2nd and 3rd, and that I won't need to settle with them anytime soon. I guess what I need to do is be prepared to walk away if we can't get the modification. Has anyone out there gotten a modification after a Chapter 7 discharge?

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            #6
            Originally posted by ld2366eh View Post
            Has anyone out there gotten a modification after a Chapter 7 discharge?
            Yes, but there are a lot of factors. First, income - if you are staring at a Ch 13, you are likely high enough in income to not qualify for the federal programs. That does not mean that you can't get a mod directly from your bank. Second - are your 2nd and 3rd with the same bank as your 1st? If so, that throws a major wrench into a mod.

            Last - a mod isn't all that it is cracked up to be in most cases. Here is a thread that talks about mods and how they are done: http://www.bkforum.com/showthread.ph...-Ch7-Discharge

            A modification may make the payment lower, but you would likely still be underwater. In addition, the second and third would have to play ball to make it work.

            I hated walking away from our house, but it wasn't the end of the world.

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