Have to File Can I Keep Vehicles??

[RandyOne]

Finally heard back from mortgage company. They won't work with us, Said we will have to file bankrupcy. Haven't had hardly income in over 8 months due to construction being down. Charpter 7 looks like the way to go. My wife and I have about
5K in personal belongings. All credit cards are paid off. The only debt we have is a big upside down position on the mortgage.

Our concern is loosing the vehicles we have. We use for transportation to & from work. I have my work truck valued at 25K, I owe 14K on it but will continue to make payments. Wifes car is paid off valued at $12K, daughters car (in our name) valued at $ 9K and paid off. Does it look like we'll loose any of the vehicles?
Thanks.

[One Half Full]

Have you considered just forclosure? The Mtg Co can't make you go BK. The also can't stop you from forclosing. Your cards are paid up, and you are off because of a slowdown in construction? Other than normal living expenses, it seems you dont have much debt other than the 14K car. What I've been seeing here is BK ch7 people generally have a lot of credit card/hospital bill debt. Going BK will not stop the fact that you are not working now. It seems to me, if you forclose, you can move to a smaller or less expensive place.

I'm not a lawyer. I'm just giving my opinion after reading a lot of stuff here. Thanks.

[SubPrimeME]

Have you considered just forclosure? The Mtg Co can't make you go BK. The also can't stop you from forclosing. Your cards are paid up, and you are off because of a slowdown in construction? Other than normal living expenses, it seems you dont have much debt other than the 14K car. What I've been seeing here is BK ch7 people generally have a lot of credit card/hospital bill debt. Going BK will not stop the fact that you are not working now. It seems to me, if you forclose, you can move to a smaller or less expensive place.

I'm not a lawyer. I'm just giving my opinion after reading a lot of stuff here. Thanks.

I would look at short sale or deed-in-lieu. Foreclosue is nasty, as the mortgage company can get a deficiency judgement against you. Not all lenders will do this, but if they do, you will want the BK in your back pocket- you can have the judgement cleared up with the courts as well.

SO I guess I'm on the fence with you, I would say try the short sale first- the 1099 doesn't apply anymore, meaning you don't have to pay tax(necessarily) against what the IRS sees as a gain- even though it's a loss- IE you owe 350, and the place sells for 300, you used to have to pay tax on the 50k, but the new law Bush just signed is supposed to help with that. However, there are loop holes with this, and you should speak to a tax professional on that.

OK steps:

1- Attempt a short sale(get a realtor who knows what that is!!!)
2- try deed-in-lieu of foreclosure(normally you need 90 days on the market to be considered)
3- traditional foreclosure- scary with judgements possible
4- BK

Some would argue to BK before the foreclosure, as you get hit twice on the credit report. BUT in your case, you need to see if they will come after you for a Deficiency after the foreclosure occurs.

Do you only have the 1 mortgage, any other liens? As my first 2 steps can only help if the title is 'clean' meaning there is only one lein on the home.

Hope this helps- I think alot of us are in your shoes, and for me, the BK was the only option as my mortgage company- well I should say my HELOC is planning on getting a judgement, too bad for them that a 7/13 will wipe most if not all of what I owed- had they only freakin worked with me!?!?

Best piece of advice I can give you: call the lendor and see what options you have!

[SubPrimeME]

I should also say, the mortgage company will indeed work with you, you MUST insist on speaking to a Manager, or someone who is not a cust rep. A foreclosure is the worst thing that could happen to them... I don't know of any lender whom won't work with you if you have a clean title...

Are you behind on payments?

Also, in a BK you can keep your vehicles, you just need to list them on the BK as exempt.

[RandyOne]

Thanks for the replies. A little more background maybe needed here. When I first saw the downturn in the housing market, I tried to approach my lender with a plan to pay X amount a month to cover what interest they stood to loose if I couldn't make the house payments and asked if they could extend the terms of my note out 6-12 months until business picked back up. They declined and would not consider it.

We stopped making the 1st & 2nd mortgage payments based on the advice of three different bankrupcy attorney's (all 3) we talked to three month ago.

I have the 1st mortgage for $577K and a 2nd for $97K. When we refinanced back in March of 2007, the lender who we have currently had the property appraised for $ 725K.

Three weeks ago, they were finally ready to talk, and said that they would consider doing a deed of trust in luei of Foreclosure, but what have to get it appraised. Their appraiser cam out and came back with an appraisal of only $490K. How do you justify a drop of $225K in 11 months. Whats up with this. I realize that property values have fallen a bit, but come on.

After I talked to the manager this morning, she said we would have to file for bankrupcy. Great attitude.

[One Half Full]

I also got in touch with my MTG co and they said they would not work w/ me. I just wanted to get caught up on my heating bill. They pretty much sealed their own fate as far as I am concerned.

I was told that it is very rare that the mtg co actually sues you after foreclosure. Also with Deed in Lieu and also short sale, you are taxed on the difference. I just had a friend who went foreclosure w/out BK and he said his lawyer said it probably would not happen.

Caviet: Of course, now that there is a lot of this going around they may toughen the rules.

I am still not a lawyer.

[SubPrimeME]

Thanks for the replies. A little more background maybe needed here. When I first saw the downturn in the housing market, I tried to approach my lender with a plan to pay X amount a month to cover what interest they stood to loose if I couldn't make the house payments and asked if they could extend the terms of my note out 6-12 months until business picked back up. They declined and would not consider it.

We stopped making the 1st & 2nd mortgage payments based on the advice of three different bankrupcy attorney's (all 3) we talked to three month ago.

I have the 1st mortgage for $577K and a 2nd for $97K. When we refinanced back in March of 2007, the lender who we have currently had the property appraised for $ 725K.

Three weeks ago, they were finally ready to talk, and said that they would consider doing a deed of trust in luei of Foreclosure, but what have to get it appraised. Their appraiser cam out and came back with an appraisal of only $490K. How do you justify a drop of $225K in 11 months. Whats up with this. I realize that property values have fallen a bit, but come on.

After I talked to the manager this morning, she said we would have to file for bankrupcy. Great attitude.

Ya, you gotta love those that don't understand that it's our financial future on the line here!

Our house lost 125k in a year too! After we got the HELOC a year earlier!

SO YOU do have a 2nd mortgage! A deed-in-lieu will not work. Not unless you agree to take on the 2nd outside of this whole deal. That's what I ran into as well!
Short Sale will not work- well it might, but you probably don't want it to, not with the 2nd being in the way.

Because your business has been down, you may be able to do a chp 7- as they base the Means on the previous 6 months, not sure about the I/J.

Have you done the Means test yet? If not, that will give you a pretty good idea of where you at!

No other debts though, other then about 5k?

Hmmm.... the more I type... Is the 2nd with the same lender? Can you try to work out a restructure with them?

I dunno, a foreclosure will be nasty, that 2nd will come after you! I almost promise you this! Then you will have a judgement for the entire 97k! YIKES!@! BK will the only option, and you may only be able to do a 13... 97k / 60 mos! Well it will be less then that, but still!

Ya, defiently try to do a mortgage modification with them....