Update: BK 13 Conversion to BK7 (walking away from Home)
To all,
Guess Ill start this thread off by saying thank you to all the board members for your response and support. For anyone who wasnt following here is my situation because I will keep this thread ongoing until the final outcome (bad or good). Bk13 2009 with Lien Strip of 2nd (BOA) and 1st Mortgage (Arrears), BK13 payment $700 then to $1000 b/c of Mortage arrears. Everything honky dorry until recently with decrease in hours (Im Part time) as well as overtime, and side jobs drying up, house hold income will go down by $1200/month average. That and our house being $60K+ underwater and is only a starter home (mortgage $3650/month @ 7.25 APR). So as of this past two months, brainstorming with my better half we decide to try and move to Florida to be closer to family/start over if we end up we can walk away from the house successfully.
NOW, Spoke with lawyer today in person and brought recent Tax Filings as well as recent pay stubs, and this is what he proposes:
We will go for a conversion, although I am over the median for family of 4 in NJ, I was only over by about $635 on original Means test (OT and Extra time included). Particularly because we wanted to save the house. He further advised I should NOT pursue any extra/overtime other than what im hired for (24hrs/week), NOT pay my mortgage starting now and in about two months (sept/oct)when lender files to lift relief of stay we will THEN file for CH7 conversion, and he was pretty confident it should be no problem, BUT KEEP current on BK13 payments. (PS: $1500 for Conversion, but I dont care, I feel he is worth it since day one, pluss he Used to be a trustee back in the day for chapter 11's.)
I then went and asked the following questions:
1.) Will I have to do another means test at that time?
He Said no, pretty much will just collect a few new paystubs with my current income to show I CANNOT afford the house, and convert.
(he said not to worry about mortgage vs rent because he will file current circumstance, o no redo on the means test?)
2.) I forget to ask if I should change my withholdings on my W4 because right now it is (Fed: Married 0 +$100/State: Single 0),my initial filing was Single 0. Should I change it back?
3.) I asked how long would it take once Automatic stay has been lifted that we will be forclosed on? We were about 6 months behind when we filed ch13, will it continue from that 6 months? or start over?
He really did NOT know the answer to this but he said to plan for a place to move to if forclosure is sped up? My Neighborhood isnt so bad (Belleville NJ) with a few FC/pre-FC here and there but not
around my part really, will that speed anything up with the forclosure/lenders wanting to resell my house right away before it just sits here?
4.) Lastly, Worst case scenario which my attorney does NOT think will happen is if our conversion is NOT approved is dismissal, which if it is then how long do we have to wait before refiling into a ch7? and should we just redo it here in NJ or go to florida? I would rather just stick it out and redo it here, than relocate to florida and have all the headaches there ON TOP of relocating.
Thanks all, any comments or suggestions would be great, Also anything I overlooked that I should think about or prepare for in the upcoming battle?
Guess Ill start this thread off by saying thank you to all the board members for your response and support. For anyone who wasnt following here is my situation because I will keep this thread ongoing until the final outcome (bad or good). Bk13 2009 with Lien Strip of 2nd (BOA) and 1st Mortgage (Arrears), BK13 payment $700 then to $1000 b/c of Mortage arrears. Everything honky dorry until recently with decrease in hours (Im Part time) as well as overtime, and side jobs drying up, house hold income will go down by $1200/month average. That and our house being $60K+ underwater and is only a starter home (mortgage $3650/month @ 7.25 APR). So as of this past two months, brainstorming with my better half we decide to try and move to Florida to be closer to family/start over if we end up we can walk away from the house successfully.
NOW, Spoke with lawyer today in person and brought recent Tax Filings as well as recent pay stubs, and this is what he proposes:
We will go for a conversion, although I am over the median for family of 4 in NJ, I was only over by about $635 on original Means test (OT and Extra time included). Particularly because we wanted to save the house. He further advised I should NOT pursue any extra/overtime other than what im hired for (24hrs/week), NOT pay my mortgage starting now and in about two months (sept/oct)when lender files to lift relief of stay we will THEN file for CH7 conversion, and he was pretty confident it should be no problem, BUT KEEP current on BK13 payments. (PS: $1500 for Conversion, but I dont care, I feel he is worth it since day one, pluss he Used to be a trustee back in the day for chapter 11's.)
I then went and asked the following questions:
1.) Will I have to do another means test at that time?
He Said no, pretty much will just collect a few new paystubs with my current income to show I CANNOT afford the house, and convert.
(he said not to worry about mortgage vs rent because he will file current circumstance, o no redo on the means test?)
2.) I forget to ask if I should change my withholdings on my W4 because right now it is (Fed: Married 0 +$100/State: Single 0),my initial filing was Single 0. Should I change it back?
3.) I asked how long would it take once Automatic stay has been lifted that we will be forclosed on? We were about 6 months behind when we filed ch13, will it continue from that 6 months? or start over?
He really did NOT know the answer to this but he said to plan for a place to move to if forclosure is sped up? My Neighborhood isnt so bad (Belleville NJ) with a few FC/pre-FC here and there but not
around my part really, will that speed anything up with the forclosure/lenders wanting to resell my house right away before it just sits here?
4.) Lastly, Worst case scenario which my attorney does NOT think will happen is if our conversion is NOT approved is dismissal, which if it is then how long do we have to wait before refiling into a ch7? and should we just redo it here in NJ or go to florida? I would rather just stick it out and redo it here, than relocate to florida and have all the headaches there ON TOP of relocating.
Thanks all, any comments or suggestions would be great, Also anything I overlooked that I should think about or prepare for in the upcoming battle?
Comment