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If I surrender the house, how can I still file for chapter 7?

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    #1

    If I surrender the house, how can I still file for chapter 7?

    One of the big monthly payments I have is the mortgage. If I decide not to keep the house, wouldn't that make a difference whether I qualify for chapter 7? Don't you have to be up to date on your mortgage to file chapter 7?

    What if I file chapter 7 but then don't sign the reaffirmation papers? Can I legally walk away from the house?

    I'm so confused today.
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    #2
    You can surrender the house in BK, just make sure that your income to debt for the means test includes some sort of housing expense to qualify you for the 7. Otherwise it might mess up your ability to qualify.

    If you File 7, and do not reaffirm, the mortgages will be iib, and at a later date you can walk if you need to, but you will have a foreclosure on your cr's as well as a bk. By surrendering, you avoid the double hit.

    You do not have to be current on your payment to file CH7.

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      #3
      oh, okay...so instead of a mortgage payment on the means test, I would include rent....?

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        #4
        Something like that. You have to live somewhere. Otherwise it's going to look like you have a lot of $$$ left to pay back creditors.

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          #5
          Your attorney can run the means thest with and without the mortgage and let you know where you stand.

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            #6
            In some areas they will allow you to use the mortgage payment even if you are surrendering, ask your lawyer and see how things are in your district.
            May 31st, 2007: Petition Filed by my lawyer
            July 2nd, 2007: 341 Meeting Held
            September 4th, 2007: Discharged and Closed.

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              #7
              After more thought, and talking to my husband...I've decided not to surrender the house. That was always the plan. It's not that high of a mortgage and has not lost major equity. I was looking at rental options but we'd be paying just as much in rent basically.

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                #8
                You really need to run everything by an attorney in a consultation. If you have a "lot" of equity in your home, it could create a problem for you also....

                Keep us posted...
                Minny

                "It's amazing the paths that our feet sometimes follow in life".

                My suggestions are from "personal experience" and research only. Do not consider this as legal advice. Each bankruptcy case is different.

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                  #9
                  Minnymouth...I don't have a lot of equity in the house but it is not under value by 40-50,000 and I don't have a second mortgage or anything. I've met with an attorney already and keeping the house and my car didn't seem to be a problem.

                  Some days though I just feel like walking away from everything. Let them have it all.

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