What should I do?

[JustChillin]

I am in a big hole that I need to dig myself out of. I bought a house on March 4, 2005 and sell my old home. Here I am in August, two months behind on my new house (due to a loss of $450 in income), and the other house didn't sell and I am being sued for foreclosure along with my mother. I took out three payday loans in the past 90 days to pay for bills, food, and mortgage payment. I have a bank account that is still open but is overdrawn and all my efforts to try to save money to get it paid and get everything caught up HAS BEEN A TOTAL WASTE.

I have been working really hard on a budget for my household and I have finally gotten one that will work, but I can't pay all these past due amounts at one time.

I really think bankruptcy would be my best move, but I am worried. Can I surrender the old house, and list the arrearage on the new one in a Chapter 13? If I could file a Chapter 13, I would be able keep the other payments on time. I have several job interviews in the next few weeks to make up the lost income, but the new income won't come in time to stop forfeiture of my real estate contract. (I might be wrong).

I have had several consultations with local bankruptcy attorneys but they have told me different things, like file a Chapter 7 and get caught on the new mortgage, others told me to file a chapter 13 and if I could save up the money for the new mortgage to catch it up before October 1 to pay them directly and convert to a chapter 7, and then another told me to do a straight chapter 13.

However, all three attorneys agreed on two points: (1) file ASAP - close old checking account - reopen new account at same bank to stop payday loans ; and (2) the overdrawn checking account at an old bank cannot be reported to chex systems if I file before they close the account for NSF, because they would be violating the automatic stay if they reported me. Is that true? I'm so confused.

Help!

[edwards2]

Okay so you bought a new house before you sold your old one? Did you have reason to believe the old one would sell? The way I understand it you have to be current to file a Chapter 7. Item (1) I have heard that same advise about closing the account many times so I would say yes to that one and (2) I have also heard the same thing about this item but I also know that banks will only let your account be NSF for so many days and then they charge it off so you do want to avoid it be reported to chex systems if you can. Our bank told us they typically do not do (2) unless the customer is a new customer or has had a lot of returned checks in a short period of time. If they see deposits are made consistently they will "let some checks go through" and also allow the account to be in a NSF status for again, a brief period of time. They told me the NSF time is about 30 days but I am sure it varies with the bank and the customer. If you file a Chapter 7 your debts for the most part are discharged; I am sure you realize a Chapter 13 means you pay a percentage of your disposable income to your creditors. They also told you to take care of business so to speak before October 1. They are telling you with absolute certainty you do NOT want to be filing under the new BK law. Good luck..we will help you in any way we can.

[JustChillin]

Did you have reason to believe the old one would sell? The other one was supposed to sell and it fell through. I can't find a buyer now and my mother doesn't want to keep it. I am a joint debtor on that house with my mother in case anything happened to her, I would have a house for my disabled sister.

I am the principal debtor on the new house. In the last 8 weeks, I have worked 5 weeks. I am looking for other work and have interviews with several very good companies in my area over the next few weeks.

Would I be in trouble if I filed a Chapter 13 for the new house? I was second on the other house and I don't want a 1099 coming to me next year for a bunch of money on a house that clearly isn't worth it. I looked through the foreclosure papers today and found out that the mobile home was never titled by the original seller in the state of New Mexico and essentially doesn't that make the loan illegal. I was completely surprised by that.

[Cmonlottery]

Just from personal experience it is going to be tough doing a chapter13 with the expectation of having a higher income in the future. My wife and I tried this and failed miserably. And now we have lost everything. If at all possible catch up on the first mortgage and do a 7.

Just FYI: I don't know the accuracy of this statement but it was posted somewhere else on this forum that every 1 out 5 chapter 13 plans are completed succesfully. It will be very hard to do this w/o consistent income.

[J Armstr]

We had two houses in two different states... one had a $2000/mo mortgage and the other had a $700/mo mortage. We were renting the $2000/mo mortgage for
$1200/mo, but never got a check bigger than $500/mo from the property manager (nickel and dime stuff). That was what drove us to BK Ch 7 with the loads of other debt (RV, CC, etc) we had. In our Ch 7 petition we listed the $2000/mo home for surrender and are keeping the $700/mo home.

Regarding your checking accounts...I would close your current account where the NSFs are going to happen and go open a new checking account at a different bank. I wouldn't trust a bank with my money when I have another account with them that is overdrawn. They could take your money even though it is not within the law and it will take awhile to get it back. After you and lawyer put steps in place to get your money back, you would be left without any money. Since BK, my wife and I actually pull out as much money as possible right after my paycheck is deposited, pay as many bills cash, and live on the cash. Hope this helps a bit...

[Minnymouth]

Did I understand you to say "the foreclosure home" - a mobile home? - does not have a "perfected title"???? You do not possess a title to the mobile home with your name on it???
Do you have a deed and mortgage for land that also states the mobile home is there on the land??? And the bank/mortgage company has a lien on it all???
Your mortgage company may be holding a "lien" on land only........(if the mobile home is not on the deed)
The reason I ask is because I have been thru this already in my Chapter 7.....

Let me know,

Minny

If

[JustChillin]

Minny: It was your postings that got me looking closer to my papers and mortgage, etc. I have found out that the seller of this property has been sued for "quiet title" so many times it is pitiful. I didn't know that the mobile home hadn't been titled in my state and I also found out that the community well hasn't been certified by the state engineer's office. I thought everything with this deal was honest, turns out it wasn't. The first mortgage company actually only has the land and they are assuming the house is intended to be on the property. I am going to be filing a chapter 7. The new house I have is legitimate, contract everything.

I wish I had never bought that first place, it was curse from the first day we moved in. Any suggestions minny? Thank God I found your post and checked out my papers. I just assumed everything was legitimate.

Justchillin

[Minnymouth]

The first mortgage who actually has a lien on the "land only" can kiss their "A***" goodbye, because now they have "no legal" interest (lien) in the mobile home. That's what happened to my mortgage company........The trustee will file an adversary complaint and take the mobile home from the mortgage company. (The bank can "think they have a lien", all they want.)
Let the Bank/mortgage company have "their land back".....that's all their going to get anyways!!!!
I was not paying the mortgage company for a home/land that the "trustee had taken the home"!!!! Iwould be paying big buck for just a peice of land, with no house on it.
After it was all done and settled, I bought my land only back at fair market value (from the mortgage co)...... and home at auction prices or better (from the trustee)!! We still have not set a closing date yet!!! But in progress.
If your name is not on the title to the mobile home nor did your sign the title - but still all in the sellers name - it's not legally yours. The trustee may not be able to touch it.......even though it is "supposedly yours"!!!
The trustee could take mine because I had signed the title at closing, but the mortgage company FAILED TO RECORD it at the court house, thus the mortgage company did not have their lien against the home also....
My case is "extremely unusual" for a Chapter 7 - 1 in a million, I've been told.
Why didn't I win the lottery instead, huh, lol!!
If you do not intend to "keep" this home and land - let the bank have their land back and let the trustee "solve the problem" of getting money out of the mobile home - it's not yours"!!!!! That way you will be "free" of all of it and the expense, hopefully......
Shame you don't live in the mobile home....I've lived "payment free" for 14 months now while all this is being settled.......and I do not have to backup and pay anything cause I'm "buying them back" separately..
Hope you didn't have a lot of equity in the land/home that is in question??
If not - may be a lucky thing for you it happened this way...
Wait and see what the trustee does!!!
What does your lawyer say???

Keep me posted, I'll help anyway I can,

Minny (I'm a pro on this issue)

[Minnymouth]

ANYONE that has a "mobile home" on land - REALLY NEEDS to check their liens before they file......
Can save them a lot of grief.....

In fact, they need to check any lien - and not depend on their lawyer too (because they don't).....

Minny