Need some advice...please...

[momoffour]

Hello everyone! I have been reading all of the threads here for a few weeks now, but have never posted. I just want to thank everyone ahead of time, since you have all helped me immensely so far.

About 5 years ago, we had our house that we now live in built. Within that 5-year timeframe, we refinanced in order to pay off some debt (bad decision), which brought our monthly mortgage to $1,670.00. I work at home and my husband works outside of the home. We were both receiving a fairly decent income until and doing very comfortably fine until about a year ago. My husband's job cut his hours in half. I was able to find another at home job, which I am still working at, which supplemented the loss of income somewhat. My husband then had to go in for emergency surgery, where he was out of work for about 3 weeks (he doesn't get any benefits - therefore, he was not paid). About 4 months later, he had to have emergency surgery again, where he was only out of work about a week. I then had a 3-day hospital stay. Keep in mind, if we don't work, we don't get paid. That's when everything just went downhill. We paid for our groceries and everyday living with our credit cards, and eventually, became so totally under debt, it was ridiculous.

I have researched every other avenue (debt management, reducing pmts to cc's, etc.) and it looks like a futile attempt, as I have decided the only way to get back on our feet is to file bankruptcy. We had a free consultation with an attorney in our area. She informed us that my husband can file a Chpt 7, but I can only file a Chpt 13. The problem with me is that my parents bought a house here in FL before they moved here. I lived in it and claimed homestead, so my parents put my name on the deed. They then kept my name on it so that, when they die, there would be no problem with me selling the house. Of course, I haven't lived in that house since 1995, but I guess it's still considered an asset for me because my name is on it. My husband's name is not on it, so he can file a Chpt 7. (We have $44,000 in cc debt - car pmt of $266, and our house has gone down approx $85,000 in value, so we're basically upside down with our mortgage big time.)

I have to get caught up with my mortgage (we are a month behind), so I have to wait until the end of Oct, beginning of Nov to file until I come up with the attorney fee. Of course, now that my husband and I will be filing separately, the attorney fees will be doubled.

When we met with the atty, she said that she would want to file my husband's Chpt 7 before my Chpt 13. I cannot for the life of me remember why she said she wanted to file his first. I am behind on my cc pmts about 1-2 months. This month will be the first month that my husband will be behind on his. Don't I have more to lose (they may slap liens and such on my mom's house) if I don't file first?

Also, if anyone has ever dealt with their loss mitigation departments for their mortgage, can you please let me know how that went? I have called my mortgage company, and they really aren't very helpful. The rep told me that, yes, we can try for a loan modification, but there is always the chance that our mortgage investor (Morgan Stanley), will not approve it and it will all be for nothing. I would love to be able to lower my mortgage payments since I will be paying approx $550 a month to a trustee for the next 5 years.

I know this is very long and I apologize, but I would truly appreciate any advice anyone can give me.

Thanks again!
Deb

[JRScott]

Yes your parents house would be considered an asset of yours if you are on the title. (My mom is on her mom's home too, as is her sister and brother....for the same reason).

This is a bit complicated the way they are doing it but it does seem reasonable. My thought on the reason for the chapter 7 first is that some of the debt is joint. By filing singly on his portion of what is owed all the debt will transfer to your name and absolve him of any portion of it. Next they file the Chapter 13 for you. I'm assuming after your husband is discharged so you are looking at some months down the road, next spring most likely. This will then allow you to roll everything into the plan for the chapter 13. By having eliminated his responsibility for the debt first it should make for a lower chapter 13 payment ultimately but I can't guarantee it. At least I think that's your lawyer's goal.

Don't worry to much about the cc, don't pay em. Even in the current economic crisis I doubt they'd sue before 6 months of nonpayment.

You have to be current on the home for the Chapter 7. One trick you might try is to call them and see if they'll move 1 payment to the end of the mortgage. Some will do that and it will bring you current.

[momoffour]

Yes your parents house would be considered an asset of yours if you are on the title. (My mom is on her mom's home too, as is her sister and brother....for the same reason).

This is a bit complicated the way they are doing it but it does seem reasonable. My thought on the reason for the chapter 7 first is that some of the debt is joint. By filing singly on his portion of what is owed all the debt will transfer to your name and absolve him of any portion of it. Next they file the Chapter 13 for you. I'm assuming after your husband is discharged so you are looking at some months down the road, next spring most likely. This will then allow you to roll everything into the plan for the chapter 13. By having eliminated his responsibility for the debt first it should make for a lower chapter 13 payment ultimately but I can't guarantee it. At least I think that's your lawyer's goal.

Don't worry to much about the cc, don't pay em. Even in the current economic crisis I doubt they'd sue before 6 months of nonpayment.

You have to be current on the home for the Chapter 7. One trick you might try is to call them and see if they'll move 1 payment to the end of the mortgage. Some will do that and it will bring you current.

Thank you so much for your advice. I am very nervous about waiting until next spring to file my bankruptcy since that would bring my payments way past the 6 months, but I will ask my atty about it again.

I have tried to move a mortgage payment to the end of the loan, but my mortgage company says that I have to do a whole loan modification in order to do so. Sigh.

I am trying to figure out whether I should go ahead and start the process for a loan modification. If I can lower my monthly mortgage payments, that would ease a lot of tension on my budget, but I am unsure how that would affect my bankruptcy case once it's started.

Anyway, thank you again for your advice. I appreciate it more than you know!!