My brain chocked - What would you do?

[screwedupbyRE]

ok, another post... had a meeting with attoney today, and that brought few changes to my plan... I have been thinking, and thinking, and just thinking - not sure what to do. So I though I'll put my scenarion on this board and try to understand how your though process would work in case if I give you this puzzle ...

2 homes, one going into foreclouser, another planning to keep (though I can let go both if I file ch 7). debt 100k.

Attorney gave me an option to try for ch 13 instead. Means let the 1st house settle the lien (close the transaction), and then do ch 13 so that I can strip the lien on second, which is close to 157k. First loan is 623k, second 157k, FMV is approx 500k. So ya, even though if I keep it with second loan gone, it's still up side down for 123k (I'm ok with it since house has upgrades worth half of it, plus 'price-less' emotions).

On the other hand, attorney says my ch 7 is very easy. Let all debt go, and start new.


13 or 7

[jenopher]

Well, I had a similar decision to make. We really just tried to look at it from a business perspective. What makes more sense? Our payments in a 13 were very similar to the payment of our 2nd. So if we stripped the 2nd we got rid of it in 5 years for about the same payment if we file chapt. 7 and keep the home and the second mtg. However, I can't work and help our income for 5 years. That's 5 years of someone else butting into my finances and wanting to see my tax returns to see if I need to pay them more. We decided to go for the 7 and probably foreclose on the home shortly after depending on what military orders we get. It's looking pretty likely that we move out of state and there is no way we can rent our home for the payment. If we were in a 13 we'd be screwed! Our hope is that in 2-3 years we can use our VA loan and buy another home in an area we'd be happier in. We love our home, just not our location. Like you, with a 13 the home is still nearly 100K upside down. In 2-3 years my area will not recover that far. Prices are still droppping and then they'll settle for a bit before rising. We hope to buy before they rise much.

I'd say go for the 7. You can buy someone else's beautifully upgraded foreclosure in 2-3 years.

[deafbroke]

In my opinion the best option is to keep ot simple. Both 13 and 7 hurt your credit. If you have the option of going either way, then the simplest thing to do is go 7. That's just my opinion though. Housing market may take a long time to recover so going 13 you might be stuck upside down on home you don't want in a few years.
Realator also told me even after filing bancruptcy you can qualify to buy a home again within two years.

DB

[Stilltheone]

IMO, I would do a 7, but that's just me. Look at it this way...you're already "ruining" your credit, going through the hassle of meeting with a lawyer, 341....why not come out the other end with no debt?

We just filed and are planning on building a home within the next 2 years.

[Help!]

As long as you are below the median on income, I'd agree with everyone else and go the Ch. 7 route and part with the homes. If your income is high, I'd hesitate to go that route unless you've got a great attorney.