In chp 13 when is a Deficiency balance recognized

[busbis]

I filed for a 13 in early December. Surrendering 2 properties. One of the objections from my trustee was to get the appraised value on each property. Both lenders have claims. On one property the value came in 40K less than my loan balance. I am at 100% plan. It will take about 6 months to foreclose on the properties. My husband and I are planning to divorce due to him messing around, but have decided to work through this bk for 6 months and then he plans on taking out of his retirement to pay it off in full (that is if we don't have to include that 40K).

My question is, when is the actual deficiency balance determined? I thought it was only after the sale of the properties, however because that is taking the average of 6 months just to foreclose we plan to be paid off then. My attorney mentioned that the creditors can amend the claims at any time during the plan, however if we pay off before they amend we will be fine. I wanted to get some feedback from all of you to see if you too could shed some light.

My concern is going through this for 6 months then finding out that the 40K is part of the claim and my husband not willing to pull out of his retirement. I have spoken to our attorney about us filing for divorce and he seems to think it would be better to wait until we paid the bk off. By husband would qualify for a 7, I wouldn't therefore making me responsible for all payments. My husband feeling bad and all decided he would take out of his 401K. We were originally going to pay off in that 6 months, but now it will be from his money.

Please help. What I thought was in my best interest, may not be. My main question is when is the deficiency balance determined?

[253BK]

As far as I know the home had to sell at auction which can take 6-8 months then they can file a DEF balance but it really depends on what state you are in!

If your state allows non judicial foreclosures you might be in good shape if not then they can try and come after you but I last read that if the home was in foreclosure and you had already filed that the bank cant go after you if they dont do so within 3 months of your filing date but I could be wrong!

[busbis]

We were actually current at time of filing. The lender has just filed for the relief of stay to start the foreclose process. The property is in FL so it will take about 5 months. However the lender has a copy of the appraisal now. The claim submitted is for the entire loan balance, but I am wondering if they actually have to amend the claim once the property actually forecloses and sells.

[NewHope]

Sounds like you should have kept the property and got rid of hubby long before.....

[rrockinggramma]

Will you be able to pay off early? Unless at 100 percent then you will have to go at least 36 months.

[busbis]

I am at 100%.

[HHM]

So long as you stated your intention to surrender the house in your BK paperwork, you are covered. Like I said in your other post, you don't need to worry about this deficiency balance. You list it as an unliquidated, unsecured debt in your schedule of liabilities, and simply estimate the amount, and let the mortgage company worry about filing an actual claim in your BK.

You are really making a mountain out of a molehill on this issue.

[busbis]

My plan is less than 36 months. The additional 40K would take it to a longer term still at my 100% plan. My disposable income would still allow for me to payback. That's why it's important to understand when the definency amount is considered. If they haven't sold the property then how can there be a definency claim. They have a full claim for the total amount of the loan, however they are suggesting now that the 40K be part of my payback....which I don't want to pay back. I am having my own appraisal done which should be about 25K more than what they have. They asked for a pre-foreclosure/quick sale opinion by the appraiser.

[HHM]

That is the breaks of the game. The deficiency balance is PART of the BK...about all you can do is dispute the amount of the deficiency by getting your own appraisal and filing an objection to their Proof of Claim, but there will likely be a deficiency balance of some sort.

[busbis]

Ok I don't really want to beat this to death, but I know it is a reg z law that I should have signed a TIL at closing that goes with this property. The lender doesn't have one on file and I never had one in my closing file. Is there something I can say about that. I know there is heavy penalty's for violation of this.

[HHM]

Just because you did not sign the TILA, doesn't mean that elsewhere in your paperwork that you didn't sign that you "read it", so you may need to go through your documents.

In any event, TILA violations usually only gets you statutory damages (unless the loan was a non-purchase money security interest in your primary residence, you can have the right to rescind the mortgage up to 3 years). Statutory damages are only $2,000.

Also, even though you may not have seen a form that said, TIL disclosure, the substance of what needs to be disclosed to you probably was:
Total Finance Charge
Exclusions, if any
Amount Financed
APR
Payment Schedule
Total Payments
Security Interests

[busbis]

Im in mortgage lending myself and I have looked over my file and called the lender, there is nothing in file with my APR, amount of finance charges or anything. I'm not trying to sue to get money, just to have a case as though I could in hopes they will drop the definency claim.

[busbis]

let me state this too, it was a 2nd home where the loan was modified and I was given 50K. About 7 months ago the lender extended the term by 4 years and on both cases, no TIL was given. What are your thoughts?