Filing with a negative budget?

[momof3b1g]

momof3

Would you qualify for a loan modification on your mortgage? I know you said that your hubby was laid off, but I was just wondering if this is something that you should look into. Lowering the interest rate, or extending the term out to 30 or 40 years could reduce your payment enough that it would not be a burdon while he is unemployed and may give you an opportunity to get ahead once he returns to work. This is something we had never thought of until hubby lost his job. We have cut our mortgage payment by over $1000 a month, we are getting 3 months without a mortgage payment, and about to file bk. Well, something to think about! You could start by finding an online mortgage calculator and run the numbers, lower the rate, extend the terms. See if it makes a difference.

I was just reading about this tonight. We will look into it.

[eddiep]

momof3

Would you qualify for a loan modification on your mortgage? I know you said that your hubby was laid off, but I was just wondering if this is something that you should look into. Lowering the interest rate, or extending the term out to 30 or 40 years could reduce your payment enough that it would not be a burdon while he is unemployed and may give you an opportunity to get ahead once he returns to work. This is something we had never thought of until hubby lost his job. We have cut our mortgage payment by over $1000 a month, we are getting 3 months without a mortgage payment, and about to file bk. Well, something to think about! You could start by finding an online mortgage calculator and run the numbers, lower the rate, extend the terms. See if it makes a difference.

[momof3b1g]

Well, you asked what I'd do so... I'd let the house go. It makes no sense to me to file Ch. 7 to get out of debt, only to emerge from BK still in debt - especially when cash flow is a problem. Instead of making the mortgage payments and still being in the hole every month, I'd rent and start a real savings.

The problem with almost being able to make ends meet after discharge is that there's never any money to fall back on when unexpected expenses happen. If you let go of the house now, it leaves you and your family free to relocate if necessary for dh to find a job.

As much as I understand the attachment to a home (especially with kids!), at some point the financial burden outweighs the importance of home "ownership". We let go of our house and are starting to build our 8 month savings. Renting feels no different than making mortgage payments to us, but knowing there's money in the bank in case something happens gives us an incredible sense of peace. I never knew what it was like before, but it's what I wish for everyone who goes through BK.

We just relocated 8yrs ago and hope the HELL we don't have to do it again. Its not as easy as you think. It is very costly to relocate. I never said we had attachment to the home. Its not a burden yet. DH is only been out of work for 2 weeks. We rented out first home and would never want to rent again. Most of the time renting is way more then mortgage. Not to mention you have little say in what you can do to the house. if your even allowed pets and your cat farts the landlord as a fit. (ok maybe not that bad, but you get the point)I never want to live in anybodys home but our own.

[momof3b1g]

If your income is currently hampered due to unemployment, I highly doubt that you would be forced into a 13 even if your income were to increase by you dh getting a job. That is why your expenses should yield a negative net income. The further in the red the better off you will be.

Thats what i figured. We started to lower things then though well what if he gets a job and then we would be to positive. Would be nice, but during a BK it might work against us. We have had such bad luck. I just never know whats going to happen.

[Help!]

Well, you asked what I'd do so... I'd let the house go. It makes no sense to me to file Ch. 7 to get out of debt, only to emerge from BK still in debt - especially when cash flow is a problem. Instead of making the mortgage payments and still being in the hole every month, I'd rent and start a real savings.

The problem with almost being able to make ends meet after discharge is that there's never any money to fall back on when unexpected expenses happen. If you let go of the house now, it leaves you and your family free to relocate if necessary for dh to find a job.

As much as I understand the attachment to a home (especially with kids!), at some point the financial burden outweighs the importance of home "ownership". We let go of our house and are starting to build our 8 month savings. Renting feels no different than making mortgage payments to us, but knowing there's money in the bank in case something happens gives us an incredible sense of peace. I never knew what it was like before, but it's what I wish for everyone who goes through BK.

[UpsideDownMI]

If your income is currently hampered due to unemployment, I highly doubt that you would be forced into a 13 even if your income were to increase by you dh getting a job. That is why your expenses should yield a negative net income. The further in the red the better off you will be.

FYI. I have download bankruptcy petitions filed in my district from pacer and found (1) case that show a husband and wife having a monthly net income of $-2200. The case was discharge without issue.

[momof3b1g]

We don't have a car. But thats what i'm wondering will happen with the house in our situation.

Does anybody know what happens after you file as far as income? Could they push us into a 13 if our income changes after we file?

[UpsideDownMI]

If your income is negative, the court may not let you reaffirm your mortgage or car payment. If you don't reaffirm your house, you can still "keep and pay" without fear of foreclosure as long as you keep current. If you don't reaffirm your car your lender can repossess even if you continue to pay.

However, this can actually be a good thing. In my district, when the judge denies a reaffirmation agreement due to insufficient income, a ruling is made that allows the debtor to "keep and pay". I would check to see if your district posts "opnions" on their website and search "reaffirmation agreement".

FYI. My brother was able to reaffirm his car loan and his income was $-250.

[lalap123]

Why would a house be different than a car? I've been told that if my income can't be in the negative if I want to keep my car...

[UpsideDownMI]

They will not make you give up your house if your income is negative. If you are worried about your husband's job, don't reaffirm. I am not going to reaffirm my house, as it will protect me in the event that I lose my job somewhere down the road.

[momof3b1g]

"But I also don't want them to question that we don't have enough income to keep the house."

Doesn't this make you question whether you have enough income to keep the house?? What will you do after you're discharged if dh doesn't find a job?

Look closely at that budget on Schedule I and Schedule J - it is likely to become your reality after discharge.

You only get one shot at this and if the house is a hardship, you might want to reconsider!

So what would you do? We don't want to give up the house. What if he gets a new job? We would still have to give it up? We are thinking of just not reaffirming then we are not tied into it if we cannot afford it. The problem is if he doesn't find a job and we let the house go we will be homeless.

[Help!]

"But I also don't want them to question that we don't have enough income to keep the house."

Doesn't this make you question whether you have enough income to keep the house?? What will you do after you're discharged if dh doesn't find a job?

Look closely at that budget on Schedule I and Schedule J - it is likely to become your reality after discharge.

You only get one shot at this and if the house is a hardship, you might want to reconsider!

[momof3b1g]

As long as you're current on the mortgage and the equity is below your states homestead exemption, you keep the house. The mortgage company wants money-not another foreclosure to add to the pile.

We are border line on the equity. We had to get an appraisal. Each month that we wait just adds more to the equity.

[keepmine]

As long as you're current on the mortgage and the equity is below your states homestead exemption, you keep the house. The mortgage company wants money-not another foreclosure to add to the pile.

[momof3b1g]

It is OK for your budget to show as negative. Actually, it is better for your case if your income is negative, as this shows the trustee and court that you are truly insolvent.

Based on that, you should list your expenses based on what is reasonably expected for a family of your size to live on.

Thats what i figured as long as they won't let us keep the house because they say we don't have enough income. Would the trustee be the one to question or the mortgage company.