Considering Forclosure, Chapter 7

[jrod311]

Hi, I am going through a divorce right now and neither one of us want to keep our house. We have a double wide trailer and it is through Green Tree. We filed chapter 7 back in 2003 and it was discharged in 2004. The house was included but we kept making payments on it to keep it. We never reaffirmed the debt with Greentree to my knowledge. They didn't send me a bill for like 6 months so I called them and they said they needed my permission to send me bills agian. I sent them a letter stating I wanted to be billed again. I was worried that this "reaffirmed" my loan with them. But I never said that in the letter. I just stated I wanted them to send me bills again.

So now I look at my statment today and it states the following

"THIS IS NOT A BILL. THIS STATEMENT IS FOR INFORMATIONAL PURPOSES ONLY.

If you were an obligor on this account prior to the filing of a Chapter 7 bankruptcy, and you have received a discharge, and if the debt was not reaffirmed in the bankruptcy case, Green Tree is exercising only its rights under the security agreement as allowed by law. Green Tree is not attempting any act to collect or recover the discharged debt as your personal liability. If the above amount is not received by the stated date, Green Tree may exercise its right to seek possesion of the collateral."

So, with that statement, does that mean I can foreclose on the house and not owe a dime? I hate to do that, but with the divorce and everything else I may not have a choice. I can't afford it on my own. I understand it would trash my credit, but it is already that way.

Thanks for your help.

[BassBoy]

We received the same type of statement after we filed (old law). If you didn't sign a reaffirmation, then the debt has been discharged, so yes, you can walk away.

[SinkingFast]

While you are technically not responsible for any deficiency balance on the property, there are a couple of things you should consider regarding Foreclosure.

Until the Lender takes the Deed/Title over into their name, you are liable for the house and property. As long as the property remains in your name, you wanna be sure the property remains insured by you.

There was a recent post here about a house that burned down prior to the Foreclosure Sale:

http://www.bankruptcyforum.com/showthread.php?t=10730

Foreclosures don't take place over night. It's a process that can take from a couple of months or so to between a year or 2, depending on where you live. Check on the Foreclosure process in your particular State.

Take advantage of the time you may be able to live in the house rent free. Look at prospective places to move to. Save up your security deposit and 1st month's rent for your new place. Maybe you need attny's fee money for your divorce.

Just some thoughts for you.

[jrod311]

I guess another thing to consider is lot rent for the park that it is in. How does that work? That is $400 per month, if I stop paying that they will evict me for sure. But it is my house on their land.... They can't expect me to move the house can they? I can't afford that and have no place to take it. Once I get all my belongings out, I really have no reason to get back in the house.

[HHM]

I guess another thing to consider is lot rent for the park that it is in. How does that work? That is $400 per month, if I stop paying that they will evict me for sure. But it is my house on their land.... They can't expect me to move the house can they? I can't afford that and have no place to take it. Once I get all my belongings out, I really have no reason to get back in the house.

I think in short, yes...they can evict you and I think they could reasonably expect you to move the house or hit you up for the cost of moving your house in court if you just leave.

[SinkingFast]

Do you have some sort of written agreement for "rental" of the spot??

I'd tend to agree with HHM. The land owner would probably expect you to remove the house and the move would come out of your pocket. Plus, if you have some sort of lease, you could be held liable for any remaining, unused months of rent.

Have you tried to market the home?? May be your cheapest alternative is to sell. Or Lease with the option to buy.

[jrod311]

More than likely I can afford to pay the lot rent until the foreclosure is done, then it would be up to the bank to keep up on lot rent correct? I have no term on the rent, it was a 2 year lease and then month to month after that. It has been almost 6 years now. As for selling it, I wouldn't get as much as I owe on it, so I would end up losing money, probably about $10k, if not more. Plus it needs about $7k of work done on it, (carpet, flooring, repairs) and that is a low esitmate.

[HHM]

Most likely the bank would NOT become liable on the lot rent. The lease agreement more than likely runs to you. So even if you lose the house in foreclosure, you are still liable for any lot rent until you cancel the lease.

If your month to month, then all you have to do is give 30 days notice to vacate, and the lease will end. However, you will still be liable for any unpaid rent, and if you don't move the house, you will most likely be liable for any charges the land lord incurs for having to move and clean up the lot (however, you "might" be able to discharge those charges in a BK).

[SinkingFast]

A new BK isn't an option as they recently filed.

Hi, I am going through a divorce right now and neither one of us want to keep our house. We have a double wide trailer and it is through Green Tree. We filed chapter 7 back in 2003 and it was discharged in 2004. The house was included but we kept making payments on it to keep it. We never reaffirmed the debt with Greentree to my knowledge.

I can only begin to imagine how much it would cost to move your home.

When I was growing up, a family down the road from us, that's what the Dad did for a living. He hauled manufactured housing units, mobile homes as they were called in that day, from one location to another. Wife was a SAHM and they had 5 kids.

Sometimes Wife would go and "flag" for Hubby on a run close to home to pick up some extra money. But Dad was the primary support for the family. He made a decent living.

[jrod311]

Well I spoke with the attorney that handled our bankruptcy. He stated that as long as I did not sign the reaffermation I can walk away and they can't touch me. I called the mortgage company, and I never signed one, they don't have one on file. So I am clear there.

I also asked him about the lot rent. He said that more times than not, the trailer park will not come after you on the rent. He has dealt with my trailer park and found that to be true. I also have a connection at the local sherrif department and they said the same. That they have evictions and foreclosers in there all the time and they almost never come after the people that were living there. So I may be in the clear with this one.

I hate to do it this way, but I may be out of options.

[SinkingFast]

Sounds like you've covered your bases and learned some valuable information!

I hate to do it this way, but I may be out of options.

We all feel bad about having to go this route, BUT,........

Look at it as a business decision. You're not intentionally trying to screw anyone. You're just doing what you have to do for your own best interests.