rent or wait???

[mommichelle]

Help!
I can't sleep! We will be filing bankruptcy in the next 6 months. We had intended to file chapter 13 but when we met with the lawyer and I explained that I recently had to cut down to 1 day a week ( I am a nurse and have always worked 3, 12 hr shifts) to care for not only my children but my Dad who is sick, he suggested Chapter 7. Unfortunately, we cannot file now for another 5 months b/c we then qualify under the means test.
Okay...so our lawyer has guaranteed that we can stay in our home for the next 9 months. We have our home up for short sell for a really low price but homes in our neighborhood or Florida for the matter are not selling. Since our income has been cut in half and our APR is 14.75%, we gave up on trying to pay for our mortgage and will have it foreclosed in the BK (which we are okay with at this point).
Our fear is that what if we stay here and try to rent after that no one will rent to us. Or what if we file and the foreclosure forces us out before our BK is discharged, then we have no where to live and my children will be homeless because no one will rent to us!! We have found a rental but would be taking it now out of fear that we won't find another one ( same school for the kids, willing to do 2 years as we won't be able to buy again for a while). Our gut says stay here and live rent free like our lawyer says and try to save some money on our small income! See...I am going back and forth! Stay or rent now?? Help, I really cannot sleep.

[Priceless ProSe]

1) Your lawyer cannot garuntee you the time limit you can stay in the house, but if you have no equity in the house he is right (usually). Banks dont want to hurry foreclosures on houses that are "upside down" because they are hoping you will cure the deliquency.
2) There are millions of people with foreclosures and/or BK in recent years, they are not homeless. I personally would not rush out if I could live rent free for at least six months. You will probably not be able to find the rental of your dreams, but you should be able to find something. Usually people like us (recent BKers) cannot rent in structures managed by rental companies. These companies have to adhere to a certain standard (i.e. minimum credit score, no recent BK) so that property owners will turn over thier property to be managed, they generally dont make exceptions because it would hurt thier bottom line. What you will need to start looking for in a few months is a private owner who is renting out a house/apt, because they can be flexible. What they are looking for is usually that you have a job and you have no evictions, this is why it is important once your house is fully foreclosed leave before someone has to file eviction proceedings to get you out. My wife and I have poor credit and now no income, but even we can always find a place, in california nonetheless. Also, if you do wait six months to file maybe it would be a good idea to find a place right before you file.
3) How long do you plan to take care of your dad? What was your income before? What is it now? Does your dad have insurance and if so would they pay you to do his homecare, or would they pay for someone to watch him while you are at work? These questions are for you to ask yourself. The reason being, if your only taking care of your dad for a few weeks, and then artificially keeping your income low for 6 months to a year just to file chapter 7 then you have some math to do to figure out if this is a good plan. If you lose 4k a month for 9 months (six month before BK, then 3 till Discharge, at least) by not working and your chapter 13 payments were 300 a month for 5 years, then you did not really gain anything except a vacation. You would need to complete the means test to figure out what your payments would be if you filed chapter 13 today.

Whatever you decide the chances you will be homeless is slim IMO, youll be alright just stay on top of things. You will do better by your family if you dont worry too much, just make a (educated ) decision and go for it.

Oh and money talks, if you put down a few month rent as a deposit for a place they dont usually worry too much because it wouldnt take more than a few months to get you evicted, thus no gamble on the part of the landlord. Make sure you exempt any deposit that you leave with a landlord (dont just try to hide it) so they cant get at it.

[csrhjr31]

My husband and I will be surrendering our house shortly. At first I was very against the idea of letting our house go. Before we made that final decision, my husband and I started looking at houses that we could possibly rent. We also wanted to find a place before our BK hit our credit.

We were able to find a few homes that were somewhat comparable to our current home. We are in the process of painting and moving our furniture over into the new house. We are hoping to be fully moved in before discharge.

I see positives with both sides. I am a huge worry wart, so I didn't want to take the chance of not finding a home before we lost our current one. Now that we found one, I feel better about leaving.

On the other side, I kind of wish we would have waited a little longer to put some of our house payments in savings.

As we were looking for rental homes, it was somewhat difficult to find a house that would do a 2 year lease. Many of them only wanted a one year.

[Martha13]

Hi there! You are so not alone in this dilemma..definitely a tough choice. I could have written csrhjr31's post word for word! I am typing this as I've come back to our current home to pick up some more stuff, and do laundry. We just moved out yesterday. We had the same struggle, and while in the back of my mind I keep thinking boy, it would have been great to live "rent free" for a few months and save up that $$, my stress level couldn't take it. I needed to get our family settled.

We actually tried both approaches--completely upfront about the whole bk/fc thing, and in another instance, just disclosed the potential f/c. In both cases it was a private homeowner, and I'm such a chicken that I got all that out there thru email first, before ever looking at the rentals. I see alot of ads now that say flat out they are open to credit issues/foreclosures, etc. I hope everything works out for you. Let us know what you decide!

[Priceless ProSe]

I see your points about not worrying, but just dont worry and the problem is solved

I know several people who have quit paying on thier mortgage, none of them have moved out yet. Someone I know quit paying for like 5-6 months, then filed BK but didnt surrender the house, BK closed already, bank still hasnt even started forclosure proceedings.

I went to a lawyer on behalf of a friend (real estate lawyer) and he said its about 9 months to a year (total) before you gotta get movin (from the date you stopped paying). I dont know exactly how BK would change this, aside from the fact they couldnt start forclosure during the stay (unless they filed for relief) but it might actually make it longer.