Lawyers Pushing to file a 13

[Ann]

Evening all, today we went to a consultation with lawyer #2. She was nice enough but from the very minute we sat down she was trying to "sell" us on filing for a chapter 13. She said we probably would pass the means test to file for a chapter7 but because we had a second mortgage a 13 made more sense since we could strip the lien on the second mortgage. I am now in the process of trying to do a loan modification for both my first and second mortgage. Now, just like the first lawyer had said to us we could not do a loan modification on the second. She also said we BETTER make sure our loan mod for the first doesn't have a clause saying that if you file for bankruptcy the new mod could make it void. Does this sound right? Please reply and give me your input. STILL cannot see why I can't do a loan mod on a second mortgage prior to filing. Do you think I could try to negotiate with my second mortgage company to come down on the interest rate if they knew I would file a 13? Please any input!!!!!

[HHM]

I think what they mean by no modification of the second is that there is no government backed program to modify a 2nd mortgage. The lender may still agree to a modification, but it is rare.

I think you are probably grasping...it doesn't really sound like this attorney was pushing a chapter 13, but if you pass the means tests (and assuming you would be a 36 month plan), you probably would come out ahead filing a chapter 13 than filing a chapter 7 assuming you would strip the 2nd and your chapter 13 would be a token payment.

[Ann]

I think what they mean by no modification of the second is that there is no government backed program to modify a 2nd mortgage. The lender may still agree to a modification, but it is rare.

I think you are probably grasping...it doesn't really sound like this attorney was pushing a chapter 13, but if you pass the means tests (and assuming you would be a 36 month plan), you probably would come out ahead filing a chapter 13 than filing a chapter 7 assuming you would strip the 2nd and your chapter 13 would be a token payment.

Hmmm... that's a good take on it. They think I'm trying to do a modification on my second mortgage through the governement. No it is through the lender and although it is only for a year I thought it was a good deal. I'm 3 months behind and when all is said and done they will strip away all my late fees and past due amounts to have me become current. I will have this for 12 months. My payments will drop by 50% after the temporary mod is completed it will revert back to my previous payment of 709. with a 6.49% interest rate. How can this not be ok???? Makes no sense to me.