Need some help understanding chap 13

[253BK]

Hi all sounds like I may be pushed into using a chap 13 due to us having to much stuff not wanting to sell and keeping cars that we can afford without problems!

My question is we own 4 homes one of which we will be trying to keep! What will happen to the debts from the other 3 homes? They will all foreclose then what?

I have talked to a few attorney's and all suggest a 100% payment plan so I am confused!

We are in Wa state and have about 5500$ monthly coming in and about 4100$ going out monthly!

Any help would be great

[lrprn]

Do you plan to not reaffirm the three homes then surrender all of them during your bankruptcy to wipe out what you owe on each of them? (Trying to figure out why you are filing Ch 13 with so much disposable income?) Have you tried to sell them? Have you considered a short sale?

[253BK]

I am trying to short sale now BUT no offers! We were just going to surrender the 3 homes but didnt know what would happen to the differnace once the bank sells them! I am sure they will want us to pay the differance!

The attorney we talked to told us this would be best but couldnt really explain why! I have another meeting this week with another person hopefully that will help!

Any thoughts on all this???

[253BK]

Anyone out there??? Let me know

[busbis]

well bk253 you are in the same boat as me. We plan on filing on Thursday or Friday of this week. We plan on surrendering 2 condos and pay back 100% to all the creditors except of course the definency balance. We have met 4 attorneys. 2 of them said our case was too complex and they would loss money if they took are case. One actually stated he likes going after the "factory workers". This atty was a BIG joke. Another attorney told me to just foreclose. They didn't want to be bothered with my case either. As I sat in the office I swear 5 other couples walked in to file...they were in and out and easy buck made for that atty too.

The other 2 atty's were very good. They actually took the time to tell me that there is risk involved in filing the 13. The mtg companies could file a definency claim however all 4 attys did say that 99.9% mtg companies do not go after a definency bal. With that said our plan to file with of course our schedule budget and take out of our savings in about 7 mos to pay the bk off completely and hopefully receive a discharge (because my condo is in the state of FL and that's how long it takes to foreclose). The mtg companies could file for us not to get a discharge due to the fact tht they didn't have enough time to take possession of the property, but the way I figure if 99.9% of the time they do not even file for definency balances then why would they on a bk. Plus, if they file a claim then chances are they are coming after me anyhow if it forecloses and my other option is keeping the property that I can't afford anymore. So my option is bk and I'll take the risk. 2 of the atty's thought it would work.

I hope this helped. I am actually filing this week so I'll keep you posted. Please let me know how your other meetings go.

[253BK]

Thanks busbis that helps some! I am wondering the same thign we have the 4 hoems 3 of them would be going back to the bank and I know they wont sell for anything close to what is owed! I hate to file chap 13 and end up still having those on my credit as balanceses owed still! Let me know how this goes for you!

Thanks for taking the time to write!

[Flamingo]

Thanks busbis that helps some! I am wondering the same thign we have the 4 hoems 3 of them would be going back to the bank and I know they wont sell for anything close to what is owed! I hate to file chap 13 and end up still having those on my credit as balanceses owed still! Let me know how this goes for you!

Thanks for taking the time to write!

When you file Chapter 13, the debts involved in Chapter 13 that are listed in your credit reports will eventually be listed by the creditors as being in Bankruptcy and not as being open. They do not disappear and they cannot be removed. A good thing to do if and when you file Chapter 13 is to obtain all 3 of your reports several months after filing to ensure all of your creditors are reporting correctly. All reported items in BK will remain as such for 7 years after your date of filing, 10 years if a Chapter 7.

[253BK]

SO if I file chap 13 and surrender the 3 homes cant they come after me for the differance once they go to auction??? That is my biggest worry! And what about cars? I have a third car I dont need and would give back can they ding me for the money that is left after it goes to auction???

I really wanted to go chap 7 but they just dont think it is possible since we are right on the edge of monthly income and assets! Let me know your guys thoughts

[lrprn]

Let me know your guys thoughts

First of all, if you do file Ch 13 and do not reaffirm any mortgage or vehicle loans, when your plan is successfully completed, the lenders cannot come after you for anything remaining on your loans unles they have a prior-to-bk judgment that survives bankruptcy (a few do).

If you file Ch 7, don't reaffirm mortgage or vehicle loans, and are successfully discharged and closed, the lenders cannot come after you for what you owe on any surrendered assets unless they have a prior-to-bk judgment that survives bankruptcy.

Typically the court allows you to keep one car for each adult driver. Any more than that you are likely to lose unless you can protect all the cars with your state's exemptions.

You have a complicated bk case. You are right at the median for your family size and have high-cost, multiple assets involved. You need an experienced bk lawyer to help you sort all of this out.

It's time to make appointments for free or low-cost initial consultations with 3-4 bankruptcy lawyers in your area. Write down all your questions and how each lawyer answers them. Get going! Come back and let us know what you find out is going to work best in your situation. Good luck!

[253BK]

So how do houses work in this situation? We are giving back 3 of them soon which I am sure with the market have about 150K in loss for the 3 banks!

Plus I gave one of our cars back last week and it had at leaast 60K in negitive from a few trade in we had done!

Over all our credit card debt is low! maybe 19K how do you think this will pan out for us???

[rrockinggramma]

After the houses are sold at auction, the mortgage(s) are paid off in order, 1,2,3 etc. If not all of them are paid off, the remaining amount then becomes unsecured debt. It will be up to the 1st mortgage holder to get the others behind it to release their secured interest in the properties but that won't be your problem. Then that unsecured portion will be paid at the determined percentage if they file claims in your chapter 13. None of your foreclosed homes should have "secured" claims in your BK. All of them should be unsecured. Only your primary residence could file a "secured claim" if you were in arrears when you file.

[busbis]

After the houses are sold at auction, the mortgage(s) are paid off in order, 1,2,3 etc. If not all of them are paid off, the remaining amount then becomes unsecured debt. It will be up to the 1st mortgage holder to get the others behind it to release their secured interest in the properties but that won't be your problem. Then that unsecured portion will be paid at the determined percentage if they file claims in your chapter 13. None of your foreclosed homes should have "secured" claims in your BK. All of them should be unsecured. Only your primary residence could file a "secured claim" if you were in arrears when you file.

That's only if they file for an unsecured claim for the unpaid portion.

[SinkingFast]

The only way the Lenders can take Titles to the homes is by Foreclosure. Unless, of course, they'll accept a Deed In Lieu of Foreclosure. DIL's are rarely accepted, tho.

Once you file BK, if you're Surrendering the homes, the Lenders will file a Motion to Lift Stay so they can proceed with the Foreclosure Process.

The houses are sold at Auction per your State's Foreclosure Laws. Either non Judicial via a "Right to Sale" clause in the mortgage, or Judicially, thru the Courts.

Then it's up to the Lenders to file Claims in your BK. I think, the $$$ amount of the Sales would be considered Secured, and the deficiency balances would be considered Unsecured.

If your Lenders file Claims, the Trustee will decide who gets paid how much. Secureds and Priority Creditors first. Unsecureds are at the bottom of the list.

Once your Ch 13 payment plan is finished, your remaining debts, if any, will be Discharged. Creditors who don't file a Claim will be SOL. Those debts will be Discharged also.

[253BK]

Perfect that was what I was looking for so this might not turn out as bad as I thought! I am trying to short sale them now if that doesnt work back to the bank they go!

Thanks everyone for your input if you have any more info please post it!

[253BK]

Has anyone ever reaffirmed there home they live in and ended up with lower untrest or a lower payment??? That would be great if possible!