Hello everyone, I only ask for advice in this forum because unfortunately I'm not done with law school otherwise I'd have more experience and do it on my own.
The situation is not mine, but rather my parents, which have been affected by so many unfortunate situations that I personally find it unbelievable to live with.
They have a house which they bought in about 2001 or so, everything was ok with that except they refinanced to get rid of some debt and the loan increased and by now that house is worth less than what they owe. (HOUSE 1)
During all that process they actually bought a second house (this was before the house market went down) and right now the property is being rented. They bought this house with the purpose to repair it and sell it but as we know now, the house is still worth less than the loan. (HOUSE 2)
Through out of the years, they have been affected by so many things.
My father lost his job and had to undergo brain surgery for a tumor they found, he lost his job and was never able to get it back.
My mother's hours have been cut and that's obviously yet another hit they have taken, and I cannot personally help them in anyway without harming my future plans and career.
They have some debt(CREDIT CARDS) and I'm sure some of you know the feeling of the companies trying to get paid. By now, my father has attempted every possible loan adjustment program to lower the mortgage payment but they do not get approved.
I spoke to them about doing a CHAPTER 13 BANKRUPT PROGRAM but according to a person they spoke to, they would need to have a certain income so the judge is favorable to their financing terms; I guess all is left is Chapter 7.
Look, I know some of the questions I would ask here have been asked and answered, however, some of them are not black and white so I'll try to explain:
--- Keeping their Primary Home ---
I've read that most of the time you can keep your house, especially if the house itself is worth LESS than what they owe. (NO EQUITY)
This would be great and ideal; however, my father informed me that BECAUSE of the different "Mortgage adjustment programs" that he has applied to during the past 6-9 months... he owes around 40k to the bank because he was not approved.
In other words, what he was told (I read the letters) is that he would continue to make "reduced" mortgage payments so it would not look like he was defaulting or not paying. He was to continued to pay that reduced amount until he was approved/denied; however what happened after he was denied is that he now owes the difference of the payment plus I have no idea what else and he owes about 40k to the bank.
He was told that he needed to pay that before he could file bankruptcy or that even if he did, they would still do a "shortsale" of the house.
I suppose that HOUSE 2 and CREDIT CARDS would be filed to be paidoff by the creditors but we mostly care about this house as it is our primary residence.
Does anyone know of a specific circumstance in which a bank would object the debtor from keeping his house while owing money? I mean, it would make sense that he is filling bankruptcy because he could not keep up with the payments.
Anyhow, I hope that I did not mislead anyone or made it confusing, I know that if the house has no equity, the debtor could try and pay the debt owed but what circumstances allows the creditors to take such property by all means?
Thank you so much and feel free to PM me if you need clarifications.
Also, I'm looking for a lawyer for them in NJ - PM me if you know any good ones, I would do it myself but bankruptcy is not my specialty.
Art
The situation is not mine, but rather my parents, which have been affected by so many unfortunate situations that I personally find it unbelievable to live with.
They have a house which they bought in about 2001 or so, everything was ok with that except they refinanced to get rid of some debt and the loan increased and by now that house is worth less than what they owe. (HOUSE 1)
During all that process they actually bought a second house (this was before the house market went down) and right now the property is being rented. They bought this house with the purpose to repair it and sell it but as we know now, the house is still worth less than the loan. (HOUSE 2)
Through out of the years, they have been affected by so many things.
My father lost his job and had to undergo brain surgery for a tumor they found, he lost his job and was never able to get it back.
My mother's hours have been cut and that's obviously yet another hit they have taken, and I cannot personally help them in anyway without harming my future plans and career.
They have some debt(CREDIT CARDS) and I'm sure some of you know the feeling of the companies trying to get paid. By now, my father has attempted every possible loan adjustment program to lower the mortgage payment but they do not get approved.
I spoke to them about doing a CHAPTER 13 BANKRUPT PROGRAM but according to a person they spoke to, they would need to have a certain income so the judge is favorable to their financing terms; I guess all is left is Chapter 7.
Look, I know some of the questions I would ask here have been asked and answered, however, some of them are not black and white so I'll try to explain:
--- Keeping their Primary Home ---
I've read that most of the time you can keep your house, especially if the house itself is worth LESS than what they owe. (NO EQUITY)
This would be great and ideal; however, my father informed me that BECAUSE of the different "Mortgage adjustment programs" that he has applied to during the past 6-9 months... he owes around 40k to the bank because he was not approved.
In other words, what he was told (I read the letters) is that he would continue to make "reduced" mortgage payments so it would not look like he was defaulting or not paying. He was to continued to pay that reduced amount until he was approved/denied; however what happened after he was denied is that he now owes the difference of the payment plus I have no idea what else and he owes about 40k to the bank.
He was told that he needed to pay that before he could file bankruptcy or that even if he did, they would still do a "shortsale" of the house.
I suppose that HOUSE 2 and CREDIT CARDS would be filed to be paidoff by the creditors but we mostly care about this house as it is our primary residence.
Does anyone know of a specific circumstance in which a bank would object the debtor from keeping his house while owing money? I mean, it would make sense that he is filling bankruptcy because he could not keep up with the payments.
Anyhow, I hope that I did not mislead anyone or made it confusing, I know that if the house has no equity, the debtor could try and pay the debt owed but what circumstances allows the creditors to take such property by all means?
Thank you so much and feel free to PM me if you need clarifications.
Also, I'm looking for a lawyer for them in NJ - PM me if you know any good ones, I would do it myself but bankruptcy is not my specialty.
Art
Closed November 2010
Comment