Foreclosure & BK filing

[footballfan]

First time poster. Have been reading like no other!

Our house has entered the foreclosure process. NED filed in mid-October and sale scheduled for mid-February, 2012. It's an FHA insured loan that we've received both a partial claim and loan modification on in the past (rolled past due principal & interest into end of loan). Under water.

As much as we've tried to save the home, we've come to realize that it's just not working out. We are going to need some major repairs (roof, 40+ year old boiler, some water seepage issues), and it seems just not worth it any more.

We have retained an attorney to determine our BK options. Based on my non-attorney calculations, we probably don't qualify for Ch 7; however, our attorney thinks we will be able to.

However, on our questionaire and draft bankruptcy petition, we claim our intentions are to keep the home. Truly, we don't expect to be able to. After all, we are in the foreclosure process and just don't see being able to make up 6 months of mortgage arrears in the span of 90 or so days if we do manage to go 7.

Are we committing fraud by claiming our intention to keep the home if we don't have a plan to address the arrears?

What happens once we do file (expecting to file end of this month or possibly December) with the impending foreclosure? I suspect it is postponed until either the stay is lifted or the BK is discharged?

Any insight, advice or general recommendations are appreciated.

And I apologize if my questions are not clear or my narrative muddy. I'm sure I'll have plenty more to share and ask.

Thank you in advance!

[AngelinaCatHub]

First, you are paying good money for a pro. Listen to him until proven wrong. If you do intend to desire to keep your house, this could be worked on in BK. If not, DO NOT LIE. That is the biggest mistake you could ever make.

You will do fine. Address your paid lawyer on the house thing. LISTEN to him/her. 'Hub

EDIT: P.S. Welcome

[debee]

Based on my non-attorney calculations, we probably don't qualify for Ch 7; however, our attorney thinks we will be able to.

Are we committing fraud by claiming our intention to keep the home if we don't have a plan to address the arrears?

I don't see this as fraud.

The statement of intentions isn't asking about your lifelong intentions. You intend to keep it until you're evicted post-foreclosure. That's still an intention to stay. No one is asking you "for how long".

If using your actual mortgage expense (as opposed to the standard housing allowance) helps you qualify for a chapter 7 and your attorney doesn't see a problem using it, then I would use it.

I don't think it hurts to double-check your attorney's calculations. Lots of good ones, lots of bad ones. Trust, but double-check too. Attorney may be new, distracted, stupid, incompetent, busy sexting the babysitter. Attorney yes, but also person. I think it's okay to keep a close eye. After all, you're going to be the one experiencing all the consequences.

Oh yeah, by keeping the house you also get to include the arrears on the Means Test. That can also help keep you out of a 13.

Edit: Welcome to the forum!
Editing again: I wouldn't have to edit so much if I had a better brain. i came back to say that I agree with Hub that lying on your petition is a bad idea. I guess I just don't think of this as a lie. Many people on the forum have done it and then gone on to live in their houses rent-free for several months.

[footballfan]

Thank you both for your kind welcomes and words of wisdom.

I like to think that at the time we file, we do intend to stay in the house. After all, if the lender were to come up with some miracle plan that would let us continue living in the house, it might very well happen that way.

I tend to overthink things.

Looking forward to reading more, sharing my story as it evolves, and definitely asking more questions!

[footballfan]

Oh yes, also, am I correct in assuming that once we do file that the foreclosure process will temporarily stop?

Is it highly likely the lender will file for relief from auto stay, or will they just kinda wait things out?

I plan on staying in the house until I am absolutely told I must go. My hub would prefer to get out sooner (in fact, he wants to move at the end of this month into an apartment we had received pre-approval for a few months ago). We are both concerned about finding another place for us, our two boys still at home (oldest son in first year of college), our four cats and one dog.......

I think we cross that bridge when it becomes necessary.

Anywho --- it's great to be able to read these boards!

Thanks again.

[debee]

Tough call regarding when to leave the house. I know some people can't stick around to see if they'd get a cash-for-keys deal because it's too stressful. I hope you guys are able to come to a decision that gives all of you some peace.

It's fairly common for lenders to file to lift the automatic stay. I don't know how much time filing bk buys you in a CO foreclosure. Hopefully someone else with some info for you will drop into this thread.

Something worth discussing with your lawyer is the timeline in terms of the date of filing, your 341 and your housing situation. If you need the housing expense on your schedules I/J and you're not living in the house at the time of your 341, but are living elsewhere with significantly reduced housing expenses, it might be a problem.