Please help me with foreclosure/BK

[TatianaHdz]

I really need some advice and don't know who to turn to or what to do. My husband and I bought a house 3 years ago with an Ajustable Rate Mortgage. Recently, our rate went up and we our using over half of our income to pay the mortgage, which makes it impossible to pay lights, water, medical, etc. We just don't make enough to keep paying for this house. To make matters worse, we just found out I'm pregnant with our first child. (it only makes matters worse financially....other than the finances, we are thrilled! )

Houses in our neighborhood seem to be taking FOREVER to sell. Nicer houses than ours take about a year, and that is with an agent. If we were to sell, we would have to do it by owner, because we can't afford to pay a real estate agent and don't have equity. So, basically, it looks like selling is probably not an option.

We are considering foreclosure and/or bankruptcy now. What we are hoping is that we can file and then stay here without paying the mortgage for a few months, so we can save up to rent a house and have money for the baby. It sounds so dishonest, but we don't know what else to do and we have to try to do what we can for our baby's sake.

So, if we want to be able to stay in the home for a few months, do we just stop paying and wait for a foreclosure? Do we need to file for bankruptcy first or afterwards, or do we even need to file BK at all? We live in Texas, so I know that they can't garnish our wages or anything after foreclosure, so does BK do any good? This is all so overwhelming and confusing.

I REALLY appreciate anyone who is taking the time to read this and helping me out! This is a very sad and exciting time for us. We are losing our first house and gaining our first child. Pretty stressful, but I know we can make it through this after reading so many other peoples' stories here.

THANKS so much!!!

[sobroke]

TatianaHdz-- Just relax! Congratulations on your pregnancy. If you stop paying your payments, the bank will eventually (after 3 missed payments for me) start foreclosure. The bank started my foreclosure about 6 months ago and my house hasn't went to auction yet. I am not familiar with TX laws, but it sounds like if they can't garnish, then the only negative to this is you cr being ruined. I am not sure if you would need to file bk? Depends on your other bills. Make sure you take time to enjoy your pregnancy. The last thing you need is all this stress. I'm sure you will do what is needed to make sure your baby has food, water, clothes, and a roof over it's head. Good luck!

[bezoar]

If you can hang in there a while, you might want to see a few folks - get some advice. Go ahead & get the straight-skinny from some bankruptcy attys (BK specialists) - should be free and you don't have to sign up. I'd also talk w/ a couple of RE agents.

Problem is that Texas is debtor friendly in many ways, but foreclosure can move quickly, as it doesn't have to be done in court, in most cases.

A couple of links here:

http://www.realtytrac.com/foreclosur...strState=Texas

http://www.bankrate.com/brm/news/mtg/20001012a.asp

It's not the end of the world. Sounds like you've got too much house. You'll want to proceed with some local guidance. If you do have to just walk away from it, those folks could probably give you a better idea of just how fast things happen.

[Minnymouth]

If you are carrying other large debts besides your home, such as credit cards, big auto payments, then BK may be a good option for you.....

Doing BK will put you in position for several months to save some money for a place to rent (as long as you are under the automatic stay they cannot foreclose without going thru the court).

Also filing BK will put you in a postion to get a "fresh start" financially right along with a new baby coming....

Check out options available to you.

If we can help - let us know.... questions, just ask...

[Viper]

What other debt do you have? What other assets do you have? How is your credit rating right now?

If it's just your mortgage payment that is making life difficult consider refinancing to a lower rate.

You say that other houses in your neighborhood are slow to sell, but do you know all the details. Are these people motivated to sell or are they waiting for the best offer. I know people who have there homes on the market for years but are asking way too much money for them, basically waiting for that one buyer who just has to have that house.

Do some research and don't be shy to ask questions here, there are a lot of great people here with a lot of knowledge.


-Viper

[TatianaHdz]

Wow, thanks so much for all the friendly advice! I REALLY appreciate it. I feel kind of depressed and ashamed. I'm so happy to not be alone!

Sobroke, thanks for the kind words! You are absolutely correct...I should not let this spoil this happy time, and I will most certainly do whatever I can to make sure my baby is fed, clothed, and sheltered. I guess I should put things into perspective and realize that money isn't everything, and neither is this damn house. (sorry...just getting tired of it! lol)

Bezoar, thanks for the links! I will check them out. Sadly, we really don't have too much house. We got the best priced house we could find, because we wanted to avoid this situation. Our home was only $91k. It's a pretty small home for Texas standards at least...3 bedrooms, 2 bath, 1450 sq. ft. Problem is, when we bought the house, we had a yearly income of $56k, so we thought we were being smart by getting a cheaper house. Then my husband got laid off 2 months after buying the house and did not find a job for nearly a year. Now, we have our feet back on the ground somewhat, but our yearly income is only $39k, which is $17k less PLUS the house payment just went up due to the ARM and will continue to do so every 6 months. Insanity!

Minny, thanks! No, we don't have any other large payments. We paid of our car 2 years ago. It broke down immediately afterwards and we still haven't been able to afford to fix it due to paying for the house, so it's sitting ine the driveway...lol. We had another car repoed during my husbands lay-off 2 years ago. After that, we decided NO MORE LOANS! So we bought a $500 1991 Ford Thunderbird. God awful, ugly thing, but it runs MOST OF THE TIME! lol We're still trying to save to get the other car fixed...will cost about $1k, but we never manage to save anything due to house payment, taxes, insurance, problems with the house, medical bills, etc. Sooo...we basically don't have any other real debt. We do owe on old debt like the repo and things, but nothing current that HAS to be paid to live. So, would bankruptcy basically help delay the foreclosure then so that we can maybe live here longer? Or is it pointless to do if all we need help on is with the house really? This is confusing and overwhelming!

Viper, no other open lines of credit. Only the house. No assets either. No cash saved up. We have a $500 car, and then a car that would maybe be worth $3k if it ran! lol I don't think anyone in their right mind would refinance us due to several late house payments, no cash, a repo on our credit and several other small things. As for the other houses in the neighborhood, I know of 2 people trying to sell their home who were very motivated. One already had a new job in another city and had to move quickly. The other got divorced, and they tried 3 different times with 3 different realtors to sell it. Eventually it got foreclosed on, because the lady couldn't keep paying and no one was even looking at the house. Still, a YEAR after being on the market as a reasonably priced foreclosure in good shape, it just sold this month. This home was right next door to us. Then there are 2 across the street from us that got foreclosed on that still haven't sold and one is much nicer than our home. It's pretty sad to see, because this is a nice, quiet neighborhood to live in and it seems like everyone is losing their home! I think it is because there is so much new development in the area and people would rather get a new home than a home built in the 70s.

Once again, thanks so much for the kind welcome! I feel at home already! Sorry to ramble so much...just wanted to make sure I reply to everyone.

THANKS AGAIN!!!

[Minnymouth]

WECOME TO OUR HUMBLE HOME!!!!

Home of all those that HAVE claimed BK, are in the PROCESS of BK and who are THINKING of claiming BK...

The strong survive on this site - the weak lean on a friend or stranger - and the irritating ones often get put in their place and banned!!

We were all paddling in the same boat.....and were getting no-where financially..... SO we all have something in common. MOST OF US have had to claim bankruptcy.

We support each other, offer suggestions, answer questions BUT WE DO NOT GIVE LEGAL ADVICE - we are not qualified to do so.... that's an attorney's job...

We will stand by you thru the "THICK AND THE THIN" of the bankruptcy process..... we will laugh with you and cry with you and cheer you on towards your discharge date!

Welcome to the Bankruptcy Forum Family!

Minny

[stephanie1112]

Hi Tatiana,

If you only have the house and want to get rid of it you could file bankruptcy and surrender it or you could just foreclose. I would think either one would have the same effect on your credit maybe.

I know the bankruptcy laws have changed and if you're eligible to file Chapter 7, you can surrender the house, the past repo and anything else and have the debt forgiven. That would be the best solution to me, if you're eligible. If you file Chapter 13, you can still surrender the house, but you'll have to pay your creditors back and the trustee payments may be more than you want to pay.

In Texas the foreclosure procedure is very fast. After three missed payments most mortgage companies will foreclose and have your house up for auction on the fourth month. At least that's how it was for me.

If you can't afford to make the payments on the house, you need to just let it go. Trust me, it's not worth the stress and frustration. You especially don't need that in your condition.

What part of Texas are you in? If you are in the DFW area I can refer you to a good bankruptcy attorney.

[TatianaHdz]

Update on house & baby...

Hi guys,

I'm so sorry it has taken me so long to reply. A lot has happen in the past few weeks. First and most important, I was on bedrest due to pregnancy complications that eventually led to a miscarriage. Or at least it will...they told me the baby's heart stopped beating, so I'm just waiting to miscarry. So, as you can imagine, finances have been the last thing on our minds after losing the baby we've been trying for for 7 years. But now that I've had a couple of weeks to grieve, the finance situation is lurking it's ugly head again.

Good news is we found a house to rent! Nice little 2 bedroom for only $719 per month...that will save us a lot of money. We have decided to DEFINITELY let the house go, we're just not sure how to go about it.

The other bad news is that my husband's job doesn't seem to be going too well. He's afraid of a lay-off, and there aren't many jobs for his type of work in the area. So he is thinking about going back to the Army, which is a good and bad thing. It's good, because he'll have a steady paycheck and good benefits. BAD because in the Army, they can garnish 25% of your wages. 25% of a tiny paycheck would hurt pretty badly! Soooo...we're considering just doing the Chapter 7...but I was wondering if anyone knows about wage garnishment with bankruptcy. If we filed the Chapter 7, would they be blocked from garnishing our wages? And if we do it, I guess we need to do it quick BEFORE they take the house or do we do it after the foreclosure?

Sorry to ask so many questions! We're totally ignorant when it comes to finances. (obviously, or we wouldn't be in this situation! ;) ) I'm learning to take it one day at a time though and beginning to realize that money isn't everything. We have each other and clothes on our back, food in our bellies, and a roof over our heads (for now...LOL), so we're doing ok.

[BassBoy]

Hi guys,

I'm so sorry it has taken me so long to reply. A lot has happen in the past few weeks. First and most important, I was on bedrest due to pregnancy complications that eventually led to a miscarriage. Or at least it will...they told me the baby's heart stopped beating, so I'm just waiting to miscarry. So, as you can imagine, finances have been the last thing on our minds after losing the baby we've been trying for for 7 years. But now that I've had a couple of weeks to grieve, the finance situation is lurking it's ugly head again.

Good news is we found a house to rent! Nice little 2 bedroom for only $719 per month...that will save us a lot of money. We have decided to DEFINITELY let the house go, we're just not sure how to go about it.

The other bad news is that my husband's job doesn't seem to be going too well. He's afraid of a lay-off, and there aren't many jobs for his type of work in the area. So he is thinking about going back to the Army, which is a good and bad thing. It's good, because he'll have a steady paycheck and good benefits. BAD because in the Army, they can garnish 25% of your wages. 25% of a tiny paycheck would hurt pretty badly! Soooo...we're considering just doing the Chapter 7...but I was wondering if anyone knows about wage garnishment with bankruptcy. If we filed the Chapter 7, would they be blocked from garnishing our wages? And if we do it, I guess we need to do it quick BEFORE they take the house or do we do it after the foreclosure?

Sorry to ask so many questions! We're totally ignorant when it comes to finances. (obviously, or we wouldn't be in this situation! ;) ) I'm learning to take it one day at a time though and beginning to realize that money isn't everything. We have each other and clothes on our back, food in our bellies, and a roof over our heads (for now...LOL), so we're doing ok.

Hello TatianaHdz,

I've been reading up on your situation. I'm sorry to hear about your baby.

To answer your question, Yes, filing BK will stop wage garnishments. I live in Ohio and our Automatic Stay says, "All deductions from paychecks, except for witholding taxes to government units, must stop. No further deductions, garnishments or attachments after the date of filing.....it goes on a little more than that, but I think you get the idea. You're in Texas, so you may want to check into that yourself.

My wife and I were also on an ARM, and then my employer kept reducing working hours per week due to loss of productivity, and everything went sour......so I can relate to your situation. We have filed Ch.7 and are surrenduring our home. It will eventually be foreclosed on. We stopped payments after we retained our atty. We are still in the house and we have about 5 months left (about 6 months after hearing acc. to atty.).

We too have found a really nice, affordable house to rent. Actually, the house is bigger and better than the one we have now! Plus, it's in the same school district and my kids won't be too tramatized. They're going to need something to remain normal after we move. Anyways, we are just waiting to finalize the lease agreement (within the next week) and we are out of here. We're not waiting until last minute to move.

Best of luck to you and please keep us updated.

[TatianaHdz]

Thank you for your kind words and sharing you story, BassBoy! Sorry it took so long to reply. Things have been so hectic lately...I just keep forgetting.

I'm so glad you guys have also found a nice house to rent, especially since your kids will be able to go to the same school. I bet that's a relief!

As for us, we're feeling a lot better. We're actually looking forward to moving, because it will save us a lot of money. The house is about half the size of the one we're in now, but that's a good thing, because it will save on electric bills, especially in the hot Houston summer...a/c causes the bills to go ridiculously high.

Thanks for the info on wage garnishment. I think we will probably just do the bankruptcy then. The whole thing is scary and depressing, but I think once it's over with, we'll feel a lot better.

Well, good luck to you and your family! I pray that you guys can make a fresh start and have a much better future! Good luck with your move! I hope you enjoy the new house!

THANKS AGAIN!!!

[Minnymouth]

Check in with us often, ask questions, lean on us for support...... If we don't have an answer, we'll find someone who does......

Bankruptcy is not easy to go thru.... it has its highs and low.... lots of lows... but the end result is such a sign of relief,,,,, when it's all over.....

And usually within 2 years or so, you can purchase another home with a decent downpayment.....

So don't let your dreams die.....just stick them on the shelf for a while....

Minny

[BassBoy]

Thank you for your kind words and sharing you story, BassBoy! Sorry it took so long to reply. Things have been so hectic lately...I just keep forgetting.

I'm so glad you guys have also found a nice house to rent, especially since your kids will be able to go to the same school. I bet that's a relief!

As for us, we're feeling a lot better. We're actually looking forward to moving, because it will save us a lot of money. The house is about half the size of the one we're in now, but that's a good thing, because it will save on electric bills, especially in the hot Houston summer...a/c causes the bills to go ridiculously high.

Thanks for the info on wage garnishment. I think we will probably just do the bankruptcy then. The whole thing is scary and depressing, but I think once it's over with, we'll feel a lot better.

Believe me, and everyone else here, when it's over, you'll feel like an entirely new person. Just think about great life will be once these burdens are gone. More importantly, think about how much easier it will be to provide for your family. Think about everything you WILL be able to do for them. It's a wonderful feeling.

Well, good luck to you and your family! I pray that you guys can make a fresh start and have a much better future! Good luck with your move! I hope you enjoy the new house!

WE MOVE IN THE FIRST WEEKEND IN MARCH!!!!! WE CAN'T WAIT!

THANKS AGAIN!!!

You're welcome. Best wishes to you.

[CallDustin]

I really need some advice and don't know who to turn to or what to do. My husband and I bought a house 3 years ago with an Ajustable Rate Mortgage. Recently, our rate went up and we our using over half of our income to pay the mortgage, which makes it impossible to pay lights, water, medical, etc. We just don't make enough to keep paying for this house. To make matters worse, we just found out I'm pregnant with our first child. (it only makes matters worse financially....other than the finances, we are thrilled! )

Houses in our neighborhood seem to be taking FOREVER to sell. Nicer houses than ours take about a year, and that is with an agent. If we were to sell, we would have to do it by owner, because we can't afford to pay a real estate agent and don't have equity. So, basically, it looks like selling is probably not an option.

We are considering foreclosure and/or bankruptcy now. What we are hoping is that we can file and then stay here without paying the mortgage for a few months, so we can save up to rent a house and have money for the baby. It sounds so dishonest, but we don't know what else to do and we have to try to do what we can for our baby's sake.

So, if we want to be able to stay in the home for a few months, do we just stop paying and wait for a foreclosure? Do we need to file for bankruptcy first or afterwards, or do we even need to file BK at all? We live in Texas, so I know that they can't garnish our wages or anything after foreclosure, so does BK do any good? This is all so overwhelming and confusing.

I REALLY appreciate anyone who is taking the time to read this and helping me out! This is a very sad and exciting time for us. We are losing our first house and gaining our first child. Pretty stressful, but I know we can make it through this after reading so many other peoples' stories here.

THANKS so much!!!

I understand what you're going through, because I deal with it everyday.

[SinkingFast]

Sell the house through Assist to Sell, or Help-U-Sell to avoid commissions. You guys will have such a bad time getting ANY decent financing with a foreclosure even 7 years down the line if you let the house go. It is a bad option to use it to just get out of the house Give me a call if you have any questions.

Best Regards,
Brandon Arant

According to what I've read, that's not totally true.

I've read the Fannie Mae guidelines regarding how to review people who filed BK and had a DIL or Foreclosure. There are specific guidelines issued by Fannie Mae. Certain minumum FICO scores, so many positive reporting tradelines, letters of reference from previous landlords that payments were made in a timely fashion and such. But Fannie Mae will lend to people with a BK and DIL/Foreclosure 2 years post BK.

Other Federally backed programs, such as FHA, have similar standards. Also, other Lenders have posted on this Forum that in some cases, they can finance people 1 day out of discharge in a Federally backed program. So it is indeed possible to obtain decently priced mortgage financing in less than 7 years.