Bankruptcy and Foreclosure

[skittlzski]

Lately, it has been getting harder to keep up with my mortgage and all my bills. I am thinking about leaving the home because I know I won't be able to afford oil heating this winter. I am still paying off last winter's bill. I have a home equity loan, car payment, credit cards and large utility bills.

My company has had layoffs all year and my job may be in jeopardy to overseas outsourcing.

There aren't any jobs available that would pay better and I do part time work to help, but it is not much.

I can't even afford an attorney for bankruptcy. Not sure how bankruptcy and forclosure work, but I am seriously considering moving to low income housing.

I have a government insured mortgage and was wondering what to expect if I stop paying my mortgage and home equity loans to be able to save some money to move.

I also have questions regarding my car payment. It is a used car that I have been paying for almost 3 years and have 2 years left to pay. If I wanted to give up the car, what is the best way to go about that?

I appreciate any advice anyone could offer.

Thanks.

[BKParalegal]

In regards to the house, if you plan on letting it go, and after you consult an attorney, one process is to stop paying on the mortgage and allow it to go into foreclosure. I am assuming you are in the NE due to the heating oil reference, so most likely you are in a judicial state, with a long redemption period. If that is the case, then one strategy is let the house foreclose and then 1 day before the last day of the redemption period (some states it is 90 to 150 days), you file BK, this will extend the time in the house for another 60 to 75 days. I have had clients stay in a house for well over a year without paying the mortgage. In regards to the car, they will pop it 60 to 90 days after non-payment so just have a back up ready to go prior to that, and then you can discharge the deficiency in BK.

Again if you plan this right, you can maximize your time and cash to your benefit.

Good Luck

[b_girl]

If you stop paying for your mortgage and there is a balance due, they will sue you for the deficiency. The timeframe for when you absolutely have to leave was covered by BKParalegal much better than I could ever do, so I'll leave it at that. You could of course leave early by just handing over the keys and walking away.

If you stop paying for your car, they will come after it in 2-3 mths. Once again, if there is a balance due after the lender sells it, they will come after you for the deficiency.

In both cases, you can and will be sued for the difference unless you declare bankruptcy. Sounds like that might be your only viable option.

As for affording an attorney, if you stop paying on both your home and your car right now, you should be able to use that money to hire one in the near future. Good luck!

[skittlzski]

What if I do not let the house go and just claim bankruptcy on my credit cards and perhaps the car. Is there any way of getting out of the home equity loan?

[sharksfan]

Is there any way of getting out of the home equity loan?

The lender of your home equity loan has a lein on your house. If you BK them, they will foreclose on your house to recover the balance due on the loan.

[b_girl]

Shark is right..that home equity loan is secured by your home. We have one on our home, too, which we are discharging in our BK along with our mortgage.

[TEW]

Lately, it has been getting harder to keep up with my mortgage and all my bills. I am thinking about leaving the home because I know I won't be able to afford oil heating this winter. I am still paying off last winter's bill. I have a home equity loan, car payment, credit cards and large utility bills.

My company has had layoffs all year and my job may be in jeopardy to overseas outsourcing.

There aren't any jobs available that would pay better and I do part time work to help, but it is not much.

I can't even afford an attorney for bankruptcy. Not sure how bankruptcy and forclosure work, but I am seriously considering moving to low income housing.

I have a government insured mortgage and was wondering what to expect if I stop paying my mortgage and home equity loans to be able to save some money to move.

I also have questions regarding my car payment. It is a used car that I have been paying for almost 3 years and have 2 years left to pay. If I wanted to give up the car, what is the best way to go about that?

I appreciate any advice anyone could offer.

Thanks.

I finally got some answers today about my case and the foreclosure I live in a judicial state and it can take as long as 279 days for the foreclosure. Since I have 2 mortgages on the house I can not do Deed in lieu of foreclosure. I stopped paying back in May My lawyer kind of walked me through the process today and she thinks I will have no problem staying here until April 09.
That is different in each state.
Some things she told me to think about before walking away are.
Since the deed is still in my name. I am still responsible for the property. She has two clients right now that are being fined by the township because one had a fire and the town wants the house torn down. They are now living two states away.
The other was broken into and the plumbing was damaged it there is now a health hazard. They are also being fined until it is fixed.
I hope this help some.

[b_girl]

I finally got some answers today about my case and the foreclosure I live in a judicial state and it can take as long as 279 days for the foreclosure. Since I have 2 mortgages on the house I can not do Deed in lieu of foreclosure. I stopped paying back in May My lawyer kind of walked me through the process today and she thinks I will have no problem staying here until April 09.
That is different in each state.
Some things she told me to think about before walking away are.
Since the deed is still in my name. I am still responsible for the property. She has two clients right now that are being fined by the township because one had a fire and the town wants the house torn down. They are now living two states away.
The other was broken into and the plumbing was damaged it there is now a health hazard. They are also being fined until it is fixed.
I hope this help some.

Sounds like you had a productive meeting. I think it's interesting how each state differs in the way it handles foreclosures. Our state has both judicial and non-judicial foreclosures, but my attorney advised us it would only take 6 weeks for the bank to take the house. He also advised us that we could just hand them the keys, inform them we are gone, and walk away without liability...that the bank would secure the property from then on. It appears the best thing to do is check with your attorney.

[skittlzski]

If I were to stop making payments on the mortgage or the home equity loan, do I stop payments on both, or do I continue making payments on the home equity loan and stop the payments on the mortgage?

[b_girl]

We are giving up our house and have stopped payments on both the mortgage and the Heloc...both are included in the bankruptcy. Since both of your lenders have a lien on your home, you either have to pay them both (whether you re-affirm or not) or you need to stop paying and include them both in your BK case to avoid a default judgement.

[m0fugga]

I'd say the best thing to do is consult an attorney who knows the laws in your state. Almost all attorneys everywhere offer a free initial consultation. They can answer your questions better then anyone...