A few questions...

[dobermansarge]

First time poster here... ill just give all the facts that i can and see if anyone can steer me in the right direction...
My girlfriend and i bought a house 2.5 years ago. Only my name is on the house, she had bad credit. It was a 3 year arm. Due to her gambling problem we split up, and i couldnt afford to keep the house so i moved out. I am now 5 months behind. I have an 80% loan through countrywide, and the other 20% they sold to HSBC. How will that work for foreclosure? I owe 105,000 on the 80% and 25,000 on the 20%. what type of bankruptcy would i need to do? what kind of repayment program would i be looking at? should i foreclose or go bankrupt first? All i have for other debts is $4000 in credit cards and a car lease, as well as child support. I live in south dakota and make approximately 40,000 a year. Any suggestions? i want to start a 401k in november, can they touch that? I imagine i would need to go bankrupt? i would like to keep my credit cards...is there anyway i can just go bankrupt on the house loan?

[HHM]

I suppose, by the nature of your question, that the house is worth less than you owe?

Incidently, you're behind 5 months, havn't foreclosure proceedings already started?

What will happen depends on how your state's foreclosure law works...you won't have any issues with the primary mortgage, but you "may" run into trouble on the second.

[dobermansarge]

the house was appraised by the realtor at 149000. with early payment penalty i owed 137,000. I tried to sell it for 4 months, but when i gave up trying to make the payments, the realtor quit trying to sell it. i did get a letter saying they were accelerating the payments or something of the sort..

[SinkingFast]

You're really gonna need to chat with a professional about your situation. BK attnys will have a BK slanted point of view. You might also consult a professional Credit Counselor.

There's several variables here that impact your specific situation.

First, here's a link for you:

http://www.usdoj.gov/ust/

Upper right hand box, click on the link for Means Testing. Next page, select "Filing on or after 10-1-06" in the drop down menu. That will take you to info for the Means Test.

You'll see for South Dakota, you make about $9400 more than the Median for your State for a family of one. BUT, you definitely have a priority debt to deduct. Child support payments. AND, your car lease payment may be more the allowable auto expense deduction for your area. So you might balance out on the Means Test.

It's really gonna fall to numbers crunching. If you have enough deductions, you may qualify to file a Ch 7. If not, you'll have to file a Ch 13 BK.

You could also use one of the DOJ approved Credit Counselors to get a professional opinion of your financial options as well. Just click on the Link for Credit Counseling and Debtor Education from the main page link above. Then click on Credit Counseling and find your State. There will be a list there of approved agencies for SD.

As far as the Foreclosure goes, either one of your Lenders could initiate the process. If the 2nd starts, they get paid their amount and then the remainder goes to Countrywide. Or visa versa. But the amount due will be much more than the principal balances you currently owe. Both lenders will tack on all lates, penalties, interest, and legal fees to what you owed before you quit making payments.

You're gonna have to Consult with an attny about what might happen with your Foreclosure. Once the sale is held, you could have as much as a year long Redemption Period. That's a time frame where the owner, you, has the right to buy back the property.

http://www.foreclosures.com/www/page...2.asp?state=SD

[dobermansarge]

Thank you for your replies! A few other questions...my boss has "demoted" me in pay due to my not so good performance, so i now make 34500, is child support a guaranteed deduction off the gross income? (yes i am trying to figure out what i need to get demoted at for gross wages) what other deductions are there? Can there be a problem that my boss demoted me my pay? Also, i have a motorcycle thats paid for, can i sell it to my girlfriend as pay back for the money i owe her for helping me out? thank you for all your help in advance!

[JollyGG]

Where are you at in SD? I also live in South Dakota and just filed chapter 7. We live in Sioux Falls.

[CindyLou]

on the motorcycle thing..uhhhh sticky. sell it to someone you don't know. Unless your girlfriend had placed a lien on it when you bought it that would never hold up. if you sell it and use the money for a necessary expense, such as paying your BK lawyer or tire for you car, your ok.

Not sure what you are asking about the child support, but the part about your boss "demoting" you....well its probably not a problem it "happens" but just remember that your income, with the new law if figured on the sum of the last 6 months divided by 6 and multiplied by 12. So you'll have to work a few months at that income for the average to come down. Now I am going to take a leap here and assume that your "demotion" is in theory. Well be careful with that because if it goes back up right after the bk they will wonder if it was planned. And if its temporary then they will want to know that too. In a nutshell, you will need to wait a few months to get that average down.