Question Debt is starting to Snowball~House on Market and Not Sold Yet!

[tika]

* My home on the market for 6 months now and still not sold, every month I sell things just to get me by but it has been 6 months now. Even if my house did sell I still would not make enough to get me out of the hole.

My questions:
* If I started the filing process right now and then while I am waiting I sell the house what happens? I really need a chunk of that money for a down payment. & could I still buy a home?

* How long has anyone waited to buy a home after chapter 7?

** What are the steps for filing? What happens first? What do you usually have to bring? I am sooo scared

*HELP

[keepmine]

Is there any equity in your home? Tx. has an unlimited amount of equity that can be protected in bk.
Keep im mind, equity will be protected but, cash isn't. Once the bk is discharged, you can sell your house and do as you please with the proceeds.
Do you have cc debt or medical debt that can be discharged? If so, will you be able to support yourself without those payments?

[Minnymouth]

If the house payments is part of the financial problem along with other bills and credit cards, the you need to consider finding a less expensive place to live.

You did not say whether you had a lot of equity in your home or not. Is that what your trying to do is sell the home and get the equity, then downsize and file to eliminate the other debts....??

[tika]

Is there any equity in your home? Tx. has an unlimited amount of equity that can be protected in bk.
Keep im mind, equity will be protected but, cash isn't. Once the bk is discharged, you can sell your house and do as you please with the proceeds.
Do you have cc debt or medical debt that can be discharged? If so, will you be able to support yourself without those payments?

yes there is lots of equity in our home after we pay off our home. We are not behind on payments on our home or cars just all credit card debt. If I decide to file BK I would definatly still be able to get by with house payment and car payment. We live in the country and commute 40 minutes to work everyday and we are selling to get closer for lots of reasons 2 most important ones are gas prices and closer to the hospitals.

[tika]

If the house payments is part of the financial problem along with other bills and credit cards, the you need to consider finding a less expensive place to live.

You did not say whether you had a lot of equity in your home or not. Is that what your trying to do is sell the home and get the equity, then downsize and file to eliminate the other debts....??

That is what i would like to do, but the house is on the market now and if we get a contract soon use most of the equity on another home then file will I sill be able to file since I sold the home with equity? we are planning on putting like 25K down on another home from the equity. I read that BK looks at all money coming in for 180 days.

[keepmine]

I'd go ahead and file bk now and pull the house off the market until you are discharged.
As I said previously, equity in your home is protected by bk but not cash.
Stop paying all unsecured debt now and use that money for living expenses.
Most bk lawyers give free or low cost initial consultations. Speak with 2 or 3 and get all of your options explained.
I'd also plan on waiting a couple of years to buy post bk inorder to get better interest rates.

[Help!]

yes there is lots of equity in our home after we pay off our home. We are not behind on payments on our home or cars just all credit card debt. If I decide to file BK I would definatly still be able to get by with house payment and car payment. We live in the country and commute 40 minutes to work everyday and we are selling to get closer for lots of reasons 2 most important ones are gas prices and closer to the hospitals.

If that's the case, it is a miracle in this economy. We thought we had equity in our home. It appraised for $390K two years ago and we owed $350K. We are keeping it on the market after discharge at $329K as a short sale and the walk-throughs have all resulted in "price should be below $300K" comments. I'm not saying yours doesn't have equity, but I'm wondering if it's possible that you have less equity than you think.

We really believed that if it weren't for all of our other debt (cars, boat, cc's, student loans) we would have easily been able to afford our mortgage. Now that all that other debt is gone and we're in a rental home with a payment $1K less each month, we're shocked how tight our budget still is. You might give some serious thought as to whether you really want to keep making mortgage payments after BK, and what you'll do if the market continues its downward spiral, gas prices continue to rise and inflation gets worse. Just a thought...

[tika]

Thanks for all the information. We just got a contract on our home and now I dont know what to do. Since we still may get some of equity after paying off the home, I still wont be able to get afloat. Since my CC are really high my credit score is only 590 and with the new laws lenders are telling me that I have to wait 6 months to buy a new home.

home listed @ $122
offer was $112
counter offer for $116 + $2,500.00 to their closing
waiting now....

owe 54K on home so after closing, realtor fees and moving there would be somewhere in around 45K profit for another home, of course this is not paying on any CC debt either.

So if I cannot buy a home right away since my credit score is terrible b/c of debt ratio then will I have to pay taxes on the profit? Or should I file after I sell and will I have to let all that profit go to BK and be left with no money for a home?

[keepmine]

Didn't listen to a thing anyone told you.
Good luck-you'll need it.

[AngelinaCatHub]

Tika:

If you are in the middle of selling and can get 45k, START LOOKING right now for a place. In this housing economy, 45K is a good down payment. Purchase something FARE below your means, and live very frugal. Things may be getting tougher. Find a fixer upper if your hubby is handy. You have I think 24 mos before you will have to pay capital gains unless you transfer monies to the new house. It you do not have a hot deal, please re-read this whole thread as there are those who, if they have not experienced the problem, have heard it before. It is very inexpensive advice (free) and with very good will. DEEP BREATH, calm, and read. ‘Hub

[justplaintired]

I see others have suggested holding off selling the house until after you file. It seems someone said any equity you have in the property is protected. So it would make perfect sense to stay there, keep paying on time, file then sell. Either way it appears your credit is bad, so filing really won't matter. You will need to be current on the mortgage first and foremost if you're filing C7.

Remember you won't be paying anything you want to file on, could you make it then? Have you checked the median income for your state? Look into things like that. Also find out what is exempt in your state.

Make a list of questions to take to the attorney and meet with a few. Consultations are free most of the time. You should do this soon.

When I read your post it brought back those anxious days before we meet with our attorney. Once we had a plan, it felt like I had a weight lifted off my shoulders, you will feel the same way. You've taken the first step accepting it's time for a change.

Good luck!

[Help!]

Thanks for all the information. We just got a contract on our home and now I dont know what to do. Since we still may get some of equity after paying off the home, I still wont be able to get afloat. Since my CC are really high my credit score is only 590 and with the new laws lenders are telling me that I have to wait 6 months to buy a new home.

home listed @ $122
offer was $112
counter offer for $116 + $2,500.00 to their closing
waiting now....

owe 54K on home so after closing, realtor fees and moving there would be somewhere in around 45K profit for another home, of course this is not paying on any CC debt either.

So if I cannot buy a home right away since my credit score is terrible b/c of debt ratio then will I have to pay taxes on the profit? Or should I file after I sell and will I have to let all that profit go to BK and be left with no money for a home?

That is a ton of equity! If you use it to buy another home and then file BK to make the rest of your debt go away, don't you think a trustee might wonder why you couldn't rent for a while, pay off your debt... and then buy a home?

[JRScott]

How much in credit card debt do you owe?

[ThreadsSnapping]

So if I cannot buy a home right away since my credit score is terrible b/c of debt ratio then will I have to pay taxes on the profit? Or should I file after I sell and will I have to let all that profit go to BK and be left with no money for a home?

If you have lived in the house for more than 2 years then you will not have to pay taxes on the profit from the sale.

If your debt to income ratio is that high then you will probably not be able to buy another house right now anyway. Lending standards have tightened up substantially.

Your best best is to take the house off the market, file bk and then sell the house and get a rental for a few years. If you are worried about spending the profit from the sale of the house you can always put the money in a 2 year cd somewhere. In the end you will have no debt and your equity/profit/downpayment.

TS

[Frogge]

tika, please tell us how much you owe in credit card debt. I think you need to cancel this contract and get that house off the market if you can't make it after the sale as you say with your cc debt.