Chapter 7 and late mortgage payments and foreclosure

[frmrdwn]

This has probably been answered somewhere, but there are so many layers of threads, I can't find it. We live in Oregon and I am probably going to be late with my first mortgage payment ever this September. I have to wait until April to file Chapter 7 and I am not even certain that I want to keep my house as the plumbing is over 55 years old and needs replacing yesterday. But, if I did want to keep the house, the payments have to be current, right? My real question is, can I file chapter 7 and give up the house if I am behind on payments? Will I be responsible for the late payments or have to make up the shortfall when the house doesn't sell for what I owe? How long until the bank gets serious about foreclosing and kicks us out? I can make up the late (partial) payment by November, but don't know if that will be good enough for the bank yet.

[IBroke]

No need to be concerned. Foreclosures don't happen over night - especially not now. The current situation for foreclosures is:

"Take a number and get in line.."

If you decide to let it go in CH7, you don't owe anything.
So the answer YES. Many people actually file CH7 to give up their home they are behind on. They also use CH7 to gain some additional time to find a new place.

[PdxDavid]

I also live in Oregon and have done some research on the subject...

The timeline for a foreclosure in OR is something like this.

You miss your first payment...
for about 90 days you are going to get called by the mortgage co. asking for payment. You will receive letters about late fees and also that if you let it go too far past due. 90 days or so... they will escalate the loan and the entire balance will be due.

Once the mortgage co decides you are not going to pay they send it on to legal and start the foreclosure process. Not sure how long this part takes. Probably at least 30 more days.

Next, in OR, they have to give you 120 days notice of your home being auctioned. Some people that plan their bankruptcy file somewhere in this time period because the bankruptcy freezes the foreclosure process. I believe the mortgage co can petition the court to release the "stay" (freezing) of the foreclosure process, but that would just continue the 120 day notice mentioned above.

Next, the home is auctioned at the courthouse (I am pretty sure that is where it happens, if not, it will say on the notice). If someone buys it you have approx 10-30 days to move.

If the home does not sell the bank gets it back and then they try to sell it. Depending on the home and the price this could take a while.

In some cases if you stay the bank will offer you "cash for keys". Meaning that if you agree to give them the keys and leave the home "broom clean". They give you money. I guess they got tired of people destroying the homes before they left.

Anyways, it takes at least 6 months or so, maybe more. Some people make 0 payments the entire time.

Here is a link to some Oregon foreclosure laws

http://www.foreclosurelaw.org/Oregon_Foreclosure_Law.htm

Here is a link to a free online Nolo book called the Foreclosure Survival Guide. I found it very informative.

http://www.nololawlibrary.com/foreclosure/

Good luck

As the previous poster said, if you file Ch7 you can give up the house and the entire debt is discharged.

[frmrdwn]

Thanks for the info PDX and IBroke. Since I probably won't sleep until this is all over, I will read up on the links you provided, PDX. One more question though, and this is probably on another thread, but here I go anyway. How much money can I have on hand when I file? Does anyone know where I can find how much Oregon let's us have in the bank when we file or do we hand it all over to the creditors (is there an I hate Chase Club that I can join)?

[Naomi]

From this link: http://www.thebankruptcysite.org/exemptions/oregon.html

18.348 - Bank deposits up to $7,500, and cash for sold exempt items.