How should we manage our finances before we file?

[kellmaestra]

Hi,

My husband and I are planning to file chapter 13 to keep our cars but we want to surrender the condo. I met with the paralegal and went over most of bankruptcy particulars. However after we started gathering the necessary documentation, I realized she didn't mention how we should handle our finances before we meet with the attorney and start the filing process. I also don't remember if she said we could surrender the condo in a chapter 13.

We are not in arrears on the mortgage payment for the first time in months. Should I go ahead and pay the bills I have kept up or should I pay the mortgage and stay on time with it?

Any advice is appreciated. We are hoping to get an appt with the laywer next week.

Kell

[treehugger1]

A bit of confusion here. Do the mortgage payments refer to the condo you are willing to give up? If so, why make the payments? Why are you filing a chapter 13? In a worst case scenario, you should pay your mortgage/rent, car payments, retirement loans, etc. Anything you wish/hope to keep, you need to pay. If you know you are going to file for BK, you don't need to pay anyone whose is unsecured (CC's, etc). We will need more information to suggest what options you might have.

[kellmaestra]

Hi,

The mortgage payments do refer to the condo that we want to surrender. The paralegal said we made too much money to file a Chapter 7 and we own income tax so she recommended a 13. We have a mortgage (ARM), a home equity loan and are behind on Homeowners association fees. She figured out that we are 21K upside down in the condo.

We thought about trying to keep it but the mortgage went up another 100.00and we found out that the HOA is about to hit everyone with another special assestment fee to fix the pool in time for next summer. Last year at this time, we got hit a fee to repair stairwells at 2,200.00 per unit @ 96.00 month for 2 years.

thanks,
Kell

[lrprn]

Welcome to BK Forum, Kell - glad you found us! As Treehugger said, if you are certain you are going to file, then you continue to pay the payments for the assets you want to keep and you don't pay what you don't intend to keep and you don't pay any non-secureds.

How long are you hoping to stay in the condo? Have you found another place to live? I'm asking because once you stop paying the mortgage, most lenders will start foreclosure proceedings after you miss the second month of payments. How long you have to stay in the property depends on the state you're in. Which state are you in?

[kellmaestra]

Hi,

We live in Tennessee. We started looking at craigslist.org and other online locators but it isn't serious yet. I want to talk to the attorney before we contact a landlord.

thanks,
Kell

[lrprn]

Here's information about how foreclosures typically go in Tennessee - http://stopforeclosure.com/Tennessee...losure_Law.htm and http://www.realtytrac.com/foreclosur...tate=Tennessee .

Since TN doesn't require lenders to go to court to foreclose, your timeline to stay in the home may be shorter - looks like the usual TN foreclosure timeline is about two months.