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    Totally confused, need advice.

    I'm pretty sure we make too much for Ch 7 and will have to file a Ch 13. We want to surrender our house s we have bit off more than we can chew with that and a car payment of $675/mo. along with credit card debt. Should we stop paying on the house before consulting an attorney? We aren't able to save a dollar a month right now and I have a high risk pregnancy without any disability coverage if needing to be out on bedrest or after delivery so I'm not sure what we will do $ wise then if we kept the house and car. Hoping they can do a cram down on the car so we can at least keep that. My main concern is we have to have somewhere to live and around here that means renting. When should I look into renting an apartment? Before we file? Would they even see the bankruptcy listed that early if we wait until foreclosure is threatened before filing? Sorry for all of the questions. Any thoughts or ideas are appreciated.

    #2
    One thing I always caution people on who are considering surrendering a purchased house is to compare the monthly cost of ownership to the monthly rents in your area. In many areas, it costs way more per month to rent a similar home than it does to own, and I am not just talking about the mortgage payment, but the total "loaded" cost of ownership. For example, I bought a house this year with a monthly mortgage payment of approximately $925. Yes, I understand it costs more than that to own the house, but similar houses here rent for $1200 to $1300 a month, so it's way cheaper to own than to rent. Even if the market craters, and the house becomes worth a lot less than I paid for it, it's STILL cheaper to stay put than to move out and pay rent.

    The only time it makes sense to surrender a house is if you need to move to another city, if the house needs major expensive repairs which you cannot afford, or if you have taken out multiple loans against the property. In some of these cases, it may still be cheaper to keep the house than to pay rent, but the need to relocate, or the inability to fund major expenses could overcome that.

    You also have an extremely expensive car payment, together with an unknown amount of credit card debt. Those are the two areas you should focus on eliminating. A recent article from the Associated Press said that the average monthly car payment has increased to $450, a figure I consider outlandish enough. Yours is even higher than that! I prefer to buy inexpensive older cars, and not even have a loan. Even if driving an old car is not for you, it should be possible to buy something sensible, such as a used Toyota Corolla or Toyota Camry from a reputable dealer with a payment of $250 a month or so. A $675 monthly car payment is beyond absurd.

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      #3
      bcohen - Hi, I totally agree with your advice. I live in WA state where are our house prices are rising daily and it's a seller's market. Staying put in our home is the right thing for us because the price to buy a new house is too high right now (I don't want to go backwards from where we are - less square footage, higher mortgage) and with the hot market, rental houses are getting hard to find and are getting costly. I agree with weighing the options before surrendering the home
      Filed Chapter 13 - 07/20/12
      Discharged 8/2/16

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