Thinking Chapter 7 is the only solution for me and want to keep my house in NY

[isbktheway]

I stopped paying on my cards 3 years ago. I have one pending judgment against me for around that was never executed for whatever reason and I believe to be the only outstanding one (and will confirm with latest credit reports). Phone calls have subsided to maybe 2 a day and the debt has passed through more hands than a joint at a Phish concert and to my understanding making it less realistic for these 3rd parties to take me to court to collect on the debt. I was planning on riding it out as the statute of limitations in NY is 6 years but then there is the story of my mortgage. I have been working on a modification for close to 1 year. I have 2 mortgages. I am working with the lender on the first and was given the standard HAMP deal with a forgiveness clause that goes into effect after 2 years at which point that debt is equal to if not a little bit less than my house is worth. As you probably guessed, to make this deal go into effect I need my second mortgage to subordinate and that is where the problem comes in. I have already been paying on my first mortgage to get the loan mod process started but now it is at a stalemate because the 2nd won't subordinate without me renewing with them. I want to keep my house but can't afford to pay on the 2nd. My question is, should I file chapter 7 first, wipe the slate clean and work on the mod then OR should I start the new agreement knowing I can't afford it long time and then file? Either way I need to act quick.

[drowning123]

Chances are the modification won't happen even if the 2nd did subordinate. I've never heard of a successful modification in New York. Have you? I'd say wipe the slate clean and try to re-affirm with the 1st. If they don't want to re-affirm, then just keep paying them (ride through/thru).

[isbktheway]

I was approved but the snag was getting the second to subordinate which for the longest time was simply because they were trying to get in touch with the wrong bank! I need the mod because the original mortgage adjusted to 7.75% and with the mod would be 4.25%. So if I hold off on the mod, then file I am not sure what the first lender would do but that would get rid of the 2nd lender. And if I go through with the mod now then file not sure how well that would fly in the courts or how long I'd have to wait to file then and be paying on the 2nd or let it go, etc?

[drowning123]

I see. I'm sure other posters will be along soon who can give better advice. Good luck.