Chapter 13 question

[georgia]

Hi, Iam a longtime lurker who is seeking advice.
I have been googling my situation for hours
and cant find what iam looking for.
My husband and I are in a chapter 13 in Az for 11 months
not confirmed yet ( I have no idea if its normal for it to take this long).
After finally coming to our senses we decided that we want to surrender
our home which is about 147,000 underwater. DH spoke with lawyer today
and he insists we cant modify plan to surrender that we must short sell it and
trys to give DH realtor info. My gut says something really is not right about this,
lawyer said the trustee wont just let us keep all the money from mortgage payments
(yes I know this thats why we want to modify the plan) any insight on what his thoughts might be for this strategy would be appreciated.

[Aylajs]

I don't know why he is saying that because we are keeping our home, however to your point about not yet being confirm...We too are in AZ and are not confirmed after 6 months. I think something is really wrong with that-no communication at all from the trustee.

[despritfreya]

My husband and I are in a chapter 13 in Az for 11 months not confirmed yet ( I have no idea if its normal for it to take this long).

Arizona is the worst state in the Nation as it relates to how long it takes to confirm Plans. While a year is a long time, such is not unheard of. The average is 8 to 10 months if there are no problems with the case.

we decided that we want to surrender our home which is about 147,000 underwater. DH spoke with lawyer today and he insists we cant modify plan to surrender that we must short sell it. . .

That is BS. Let me guess, your attny is buddy-buddy with the realtor. This just pisses me off (the regulars know how animated I get). There is no reason to short sale a home in Arizona, especially if you are in a bk. The only one who benefits is the realtor who makes a commission. You, on the other hand, have to deal with the idiot lenders who may or may not (most likely “not”) agree. You then have to file a Motion with the Court to approve the sale if your Plan is not Confirmed (more $$ for the lawyer).

You simply amend your Plan to surrender the home and walk away. Live there rent free until someone boots you out. (If you have an HOA, stay current until the property is foreclosed - consider the HOA dues as your rent payment.) If you otherwise qualify for a 7 and have no other reason to be in a 13, consider converting.

lawyer said the trustee wont just let us keep all the money from mortgage payments. . .

Technically he is correct. If you simply stop paying the mortgage and live in the home “rent free” (but for the HOA if there is one) until the lender asks the court to lift the stay and then takes steps to either start or complete its trustee sale, you will be saving a ton of money. Remember, Schedule J shows a monthly mortgage payment. If, all of a sudden, you no longer are making that payment you can afford to increase your Plan payment. HOWEVER, unless your Trustee is DK I can state that the other two Trustees have never picked up on this issue - at least not in any case I was involved in. I don't know about DK.

You need to sit down with your attny and go over all of the issues. Can you do a 7? Can you file an Amended Plan to surrender the home? What are your options? If the only thing he comes up with is a short sale, IMHO find another attny.

Des.