Have come full circle

[nomorecredit]

Well it's been awhile and after looking at ALL of options we've come back to square one..filing bankruptcy. We tried to avoid this because of property that is in my husband and brothers name but his mother retains a Life Estate with this. So now after no other option and balances soaring we're filing Chapter 7. They will get a value for this and see if anyone wants to buy a future interest in it.

One of the questions we have is that our lawyer is not having us reaffirm our mortgage although we are current and plan to continue to be. We live in Ohio and our concern is how this will effect us down the road if we choose to sell. We want to live in our home at least for two more years after discharged so that we can get a decent loan. If this reads on our CR as 0 BAL and Discharged in Bankruptcy how will this look when we try and get another loan? Also what happens to all those payments we make over the two years? They won't be reported on our credit report so we can't use that to help rebuild our credit? I think because we were so short at the end of the month by their allowed expenses he thought it would look better to the trustee if we didn't reaffirm. I'm also getting a part time job that will help us but will this be bad for our case? I'll probably only be making about $350 a month, but enough to help with the all the kids extra school expenses!

Thank you for any advise. It was a difficult decision knowing my husband could lose all of his future inheritance in this property but have no other choice. Praying that a Trustee will think it's not worth the time to go after and wait until his mom passes to collect which could be another 10 years!

[Minnymouth]

If the property in question has several owners on the deed, the trustee has to take each one to court to force the sale of the land (I believe), lots of costs to the trustee.. Land value may not be worth all the trouble. Though he might suggest that one of the owners buy out your husbands share....
Also if the land is not legally your husbands until after the death of his mother, its really not his yet and cannot be considered as part of the BK...
As far as the home is concerned - a lot of mortgage companies will force you into signing reaffirming in order to get them to leave off the "included in bankruptcy" on your credit report. Also it make it easier for them to foreclose and seize should you miss payments in the future...
You might want to ask your lawyer about this.....

Nobody WANTS TO FILE - but sometimes you do what you just really have too!!

Let us know what you do,

Minny

[nomorecredit]

Thanks Minny,

We should have our case # shortly according to our lawyer who called yesterday. It's been three weeks and I just think he is really busy. Unfortunately we had to list the property as an asset of ours because my husbands name is on the deed along with his brothers.(per two lawyers who told us the same thing) However his mom as the Grantor, reserves a Life Estate in this property. Maybe I didn't word that correctly the first time. So anything that they would "sell" would have to be claimed at a future date when she passes from what I understand. It also sounded like they could claim all of it even if it was worth more than what we owe..that doesn't seem right. I mean, I'm all for them getting what we owe...but more? That was the hard part to swallow! Yes, they could ask his brother and even his mom?? to see if they want to buy it. I know his brother doesn't have the money and talk about confusing his mom..she thinks she still owns it outright. She'd flip!

I think that's why our laywer was having us NOT reaffirming our mortgage..so they couldn't come after us if we default later. However, in the three years that we have lived here we've never been late. It's just the unsecured cc debt that was killing us..made alot of bad financial decisions there! We were mostly concerned how this would effect us in getting another mortgage in the future if we decide to downsize.

I know, you're right.."Nobody WANTS TO FILE"! And I agree 100%, "sometimes you do what your just really have too!"

Thanks again!

[Minnymouth]

If you are fortunate, and the value of the land is not real high, the trustee "may" decide not to pursue the issue with all the cost involved......
A friend of mine just experienced the same thing...her mom is still living on the land and is still on the deed. The Trustee did not pursue the issue......
Cross those fingers - girl!!!! Maybe a little "Irish Luck" will come your way.....

Minny

[Minnymouth]

Within 1-1/2-2 years you should be able to refi at a reasonable interest rate and down-size if needed if you can work on getting that FICO score back up after discharge...

Filing BK did not really hurt my FICO score very much, it was still almost 700 AFTER FILING. But I also have a 40 year history of good credit...... I was amazed when I checked it.....
I'm still considered a "good risk"......bankruptcy included...

Minny

[nomorecredit]

Wow Minny, a credit score of 700 still?!?! We bottomed out over the two/three months when we stopped paying our cc per our lawyer! I couldn't believe how fast it could fall! So there is no way anyone would give us a loan now..that's why we are staying in our home at least for the next two years.

My MIL's name is'nt on the deed as such, just listed as reserves a Life Estate. I hope/pray it does go as well for us as it did your friend! Not sure of the value of the land but I do have quite a bit of "Irish" in me!! So..everything crossed that can be crossed!!

Thanks again!

[Minnymouth]

I checked my fico score before I filed - (almost 780), then after discharge (680), then 6 months after discharge still at 690.
Lawyer said it was due to filing quickly (before I was really in the hole) , only 2 months behind on 2 of out of all the bills I had (medical, cc, etc), plus the fact that I had 40 years of excellent credit behind me till just recently. I filed BK mostly because of mom's medical bills I incurred and cc debt from her care.... (tremendous bills - would never get them paid off). Most of the credit over those 40 years was with all the same creditors. Many of my accounts were "paid in full - paid as agreed by consumer". Only really bad accounts were cc that I had to use during the last 4 years (caretaker for parent). And they were rarely delinquent in payment. Many of my "paid in full" accounts are still open and active if I need to use them. The companies did not close out the accounts!
So I feel I really "lucked up" on the FICO score.
Don't get me wrong - I can't get a loan right now because I am coming out of BK....Bank said I had to be out of BK at least 1 year before I could refinance my home (if I get it back, duh - thats a whole new ballgame, there. I'm still in my home, but the Trustee holds the title to it right now - PROBLEMS WITH OWNERSHIP (my title was never recorded 7 years ago, still in sellers name) This will all be settled in court). Bank cannot foreclose because of title issue! Bank told me after 1 year - no problem re-financing.....
So I'm really fortunate in that repect with the FICO score. It will help in the future.....

Maybe you will "get lucky" too.......on the land issue. I hope so.

Let us know,
Good luck,

Minny

[nomorecredit]

UPDATE...

Signed and filed on 8/30/05. Received papers today stating that our 341 is scheduled for Oct. 27. Deadline to file a complaint objecting to discharge 12/27/05. So does that mean our case will be discharged on 12/27 providing no one objects? Also this was a Chapt.7 asset case(see previous post above) but the papers(forms) state clearly on them, (Form B9A-Chapter 7 Individual or joint debtor NO asset case) Is this just a standard form they use even with an asset case or could I be ever so lucky and they've already decided not to go after the land..not worth the trouble?

It also says..Please do not file a proof of claim unless you receive a notice to do so.

So maybe all just standard procedure?

This sure has been a road of waiting..it took a month just to get the papers filed from the time we gave them to them and it looks like another two months for our 341..I know there IS a lesson in all this..not just not to overspend but some things much deeper!

[nomorecredit]

No one want to take a guess?

[mmcconn2]

I think it is a general form, I got the same form when I filed, after my trustee meeting the trustee did try to go after a piece of property I held, we settled before a court hearing, more than likely the trustee will not go after anything but there is always a chance and yes your case will be discharged 12/27 unless the trustee challenges something. Good luck! it is a pretty smooth process.