How to handle 1,st, 2nd, 3rd mortgage...need them for means test...

[Wantmypeace]

So, I'm confused. In order to pass the means test, I need the 3,000 worth of payments on my 1st, 2nd, and 3rd mortgages. If I let "let the house go" in the bk, then I can't use the mortgage payments to qualify, right? So, then we can't do a 7. My house is worth about 215K, and we owe 145K, 175K, and 45K, respectively on the mortgages. So, how do we handle this? I know we have to list the mortgages in our bk, but do we just re-affirm the debt and then we can use it on our means test? I'm not sure how that works...

[tcreegan]

Hi wantmypeace,

Do NOT reaffirm. This house is straight out of 'lets make a bad deal'

I think you can use the mortgage payments on the means-test which looks back 6 months, but I don't think you can use them on Sched. J which is 'forward looking'

BUT....I am not an attorney, need to confirm with someone who is....

Tom in Colo

[Wantmypeace]

If I don't have them on Schedule J, won't I be forced into a ch.13? I have an appt next Wed, so I'll get more info then...

[tyson24]

The way I was told was that they leave my statement of intention open with nothing on it. My mortgage payments on my rental house are on my schedule J but I am not surrendering either I guess. (I want to but we aren't there yet) Leaves it more looking like we may try and work something out with the bank I am assuming. The nice thing we do not have to.

My attorney told me that he put our mortgage payment on the schedule J because the schedule J is expenditures that you would be paying if you "had the money."

I guess it depends on your district and what they will and will not put up with.

So basically you would not surrender nor reaffirm the house, especially when you need those pmts to qualify.

Not an attorney, not advice.

[Wantmypeace]

So, if your bk is discharged, etc. and everything is finalized, and then you decide not to pay the mortgage, won't the company come after you? I mean, how can you just walk away AFTER the BK is completed and not be held responsible for it?

[drowning123]

So, if your bk is discharged, etc. and everything is finalized, and then you decide not to pay the mortgage, won't the company come after you? I mean, how can you just walk away AFTER the BK is completed and not be held responsible for it?

Heck no. What's done is done with the courts. That's what's more important. You can just walk away. My statement of intention said re-affirm, but I'm not re-affirming and I am not amending either. You can only be held liable if you sign a re-affirmation agreement, then decide not to pay, which would defeat the whole purpose of filing for BK.

[tyson24]

wantmypeace, you put your house in the petition and the debt is wiped. If you get a discharge in a CH 7 all the debts listed in your petition are discharged and you owe nothing. If you want to pay and stay in your house, then you pay and stay. Like I put my 2 houses in the bk. My home I am staying in but my rental property is being given back at some point. I am still clear of those 2 debts whether I pay or not. If I pay my mortgage company, they aren't going to come and take my house. They COULD, but they won't as long as I stay current onmy payments.

[Wantmypeace]

So, then if you quit paying and move out, and they foreclose and sell the house, and there's still a balance from your loan, you don't have to pay it? 'Cause I have THREE mortgages on my house, and there is no where near enough equity to cover the first and even half of the second, let alone the third. So, those would all just go away? So, if you say you're intent is to reaffirm, at what point do they expect you to actually do so? Do the banks hound you for a signature after the bk is discharged or something?

[tcreegan]

Hi wantmypeace,

they foreclose and sell the house, and there's still a balance from your loan, you don't have to pay it?
Yes, unless you reaffirm the mortgage (DON'T)

So, those would all just go away ?
Yup, they all go away.

So, if you say you're intent is to reaffirm, at what point do they expect you to actually do so?
If you reaffirm (DON'T) it would be between filing and 45 days after the 341 meeting, or at least before discharge.
If you have a weak moment, remember you can rescind a reaffirmation up to 60 days after signing it.

Do the banks hound you for a signature after the bk is discharged or something?
Nope, this is against the law. Once you file, you are covered by the automatic stay and after you are discharged, you are protected by the discharge injunction. They cannot try to collect on pre-petition debts.

Hope this helps,

Tom in Colo