Mortgage and chapter 13

[Skrewed]

I'm hoping somebody will have some insight on my issue. We filed in February to save our home because of a balloon that matured. Our attorney tried for modification but we were denied since there was no loan to modify. The lender Said we were approved for a loan renewal. My husband along with our attorney spoke to the lender who said we are definitely approved and not to worry. They were sending us the info in the mail. We got a packet last Friday but it was an approval for a refi. They are asking for proof of our minimum monthly payments to creditors. We dont make monthly payments since we are in 13. We sent the packet to our attorney who sent us a letter advising us not to move forward with the refi because it will jeopardize our chapter 13 case. I understand that but can't this be treated as trying to refi while in 13? Get the trustees approval and send them our 13 repayment plan. I assumed our lender knew we filed bankruptcy. This is our last option to save our home and now we are being told we cant. It's disheartening. We are waiting to hear back from our attorney but thought I'd see if anyone here had advice.

Thank you for taking the time to read and for any insight you may have!

[justbroke]

I would certainly see what your attorney can do. In the meantime, some questions. How large is this balloon payment? Could you pay that balloon off in the Chapter 13 (in 60 months)? Otherwise, you do hint at what you should be able to do. That is to seek permission to Incur Debt in the Chapter 13, obtain Trustee and Court permission, and then refinance that loan that came due.

[Skrewed]

Thanks so much, JustBroke! The balloon is about 155K which would make our 13 payment sky high but it could be doable with more tweaking to the budget. We've managed to save a pretty decent amount in our emergency fund so when the unexpected happens we're prepared or if we'd need to use some occasionally towards the 13 payment if we needed to.

Still waiting to hear back from the attorney. We are definitely asking about getting permission to refi but I'm afraid because I don't know how long that takes and the lender is expecting our answer soon.

I just don't understand why they told us we were approved for a renewal and told us the terms but then send something else with different terms. Renewal and refi are two different things, right?

Thanks again!!

[justbroke]

Yes, a renewal would probably be an extension under the existing terms while a refinance is an entirely new contract.