Chapter 7, 2 houses....same mortgage company

[MikeJames74]

Ok, so after struggling for 3 years and having the camels back broken by credit card companies that tripled our interest rates, we're filing chapter 7.

We have a house in Iowa and a house in Illinois. Both held by BoA (countrywide). We had renters in our Iowa house but their business went under and they can no longer afford to stay there and with the economy the way it is, we can't afford to lower our rent and no one in the area can afford the house for what our mortgage was.

We are planning on reaffirming on a few small credit cards that we may need in the future.....low limits...emergency cards, sears, jcpenny and 1 other. We are also planning on reaffirming on our Iowa house and moving back into it.

Does anyone know if we're going to have a problem doing this and letting them foreclose on our Illinois house? We have NEVER missed a payment on anything. We just got beat down by the economy and the credit cards (Chase) that started a downward spiral with all our other cards by increasing our interest rates...etc.

Thanks for any info!
Mike

[MikeJames74]

and no, we can't sell either one of the houses as they are both under valued and have no savings or anything else of value....

[scorpion35]

Ok, so after struggling for 3 years and having the camels back broken by credit card companies that tripled our interest rates, we're filing chapter 7.

We have a house in Iowa and a house in Illinois. Both held by BoA (countrywide). We had renters in our Iowa house but their business went under and they can no longer afford to stay there and with the economy the way it is, we can't afford to lower our rent and no one in the area can afford the house for what our mortgage was.

We are planning on reaffirming on a few small credit cards that we may need in the future.....low limits...emergency cards, sears, jcpenny and 1 other. We are also planning on reaffirming on our Iowa house and moving back into it.

Does anyone know if we're going to have a problem doing this and letting them foreclose on our Illinois house? We have NEVER missed a payment on anything. We just got beat down by the economy and the credit cards (Chase) that started a downward spiral with all our other cards by increasing our interest rates...etc.

Thanks for any info!
Mike

those credit cards will be closed and u will not be able to use them

[MikeJames74]

Was told that they would stay open if we reaffirm

[tcreegan]

cc not something to carry through

Hello MikeJame24,

I have read lots of posts about folks trying to carry cc's through a BK.

Usually the creditor will automatically close the accts. when notified of the BK.

Have a zero balance on file date so they don't have to be listed as creditors,
hope they don't get notified of the BK via other means.

Judges and trustee's usually (but not always) frown heavily on keeping cc.s

Since the reaffirming in the BK court case is not likely to get approved, sign a reaffirmation between you and the cc company after the BK. this carries RISK, you are now legally liable for that debt. Default and you get sued.

Reaffirm before the BK, have a zero balance on file date, they don't get listed as creditors. This also carries risk, you are legally responsible for cards, default and you could be sued.

Other thought: cc companies may reaffirm cards for folks in BK, but check your new interest rate and fees. They may increase them massively just b/c of the BK.

Houses should be no problem unless you have large chunk of equity in one of them. You surrender the one house and reaffirm the other. When you are negotiating the reaffirm with BOA, ask about surrendering the other house where you sign over the deed, leave the place ready for sale, and leave early. Some lenders will actually pay for this (cash for keys programs)
Also, when negotiating the reaff w/ boa, try to get terms that you can comfortably afford. If you are getting into a mortgage that you can't afford in the future, better to face that music now than when BOA forecloses, has auction, and then gets a suit against you for the difference in auction price and what was still owed on the house.

Sometimes lucky individuals will put the house in the BK, keep making payments, get discharged, keep making payments, lender says nothing as long as you keep up with the payments. Legally not liable for the debt, you can walk at anytime.

You are not alone, cruise the forum and you find lots of folks in your position. And lots of folks willing to help. Never missing a payment does not carry much weight around BKs Most folks will intentionally quit paying a mortgage knowing that the foreclosure process will take months, and more duirng a BK, so they don't pay the mortgage, and save the money for getting a cheaper car and moving into a another place. If you know you are filing BK, paying cc's is throwing $$ down a rathole. Quit paying them and pay a good attorney.

Always remember; filing for BK is a financial decision. It is no reflection on your virtue or character. It is numbers on paper, predicted outcomes, and a business decision.

Hope some of this gibbering helps somehow.....

Tom in Colo

[SMinGA]

The only time reaffirmations happen is for secured debt, not revolving credit cards. Going thru bankruptcy is not about making sure you have options for getting back into debt. (Not that its your intention, but that is what you open yourself up to.)

I think I just posted a response to your wife, she didn't give detail on states, etc. but otherwise it was similar to your situation. It should not be a problem to let the IL house go and move back to the old house. Doesn't matter that both have the same mortgage company.

I see potential issues with WHERE you file. You need to be a resident in state X for so many months to file there. What is your time frame in mind for moving, and for filing? Also, if the other post is about your situation, you'll need to figure out exactly when you filed previously. Can't file ch. 7 if your last ch. 7 was less than 8 years ago.

Getting legal counsel - before you make any changes - is probably a good idea. Other than that, if you are eligible to file ch. 7 (based on no filings in past 8 years) then its a matter of income vs. bills/expenses.

[momsgirl]

I didn't realize he had posted - sorry for the double post

We were told to stay in IL til it was done and discharged - we plan to move in Dec - hoping to file this coming week.

[SMinGA]

No harm.

Be careful not to rush into anything. Best to take your time, make sure you are working with a good atty and that everything is done correctly. (Based on accurate info an such.)

I didn't realize he had posted - sorry for the double post

We were told to stay in IL til it was done and discharged - we plan to move in Dec - hoping to file this coming week.