Keeping my house

[adamjlaw]

I currently have 115,000 in unsecured debt. I also have a first on my house for 271,000 a second for 50,000 and a third which is an SBA loan for 330,000. The house is currently worth about 260,000. The unsecured debt and sba loan are from a business that failed, the person I bought it from gave me false financial statements regarding the business. I am now looking into bankruptcy. All other means to recover my losses have failed. I would love to keep my house. Would it be at all possible to get the 2nd and or 3rd on my house taken off due to the actual value of the home. I am meeting with a lawyer on Thursday and there was some discussion about the possiblity of this. Also how does the repayment plan work. I am teaching now and my take home pay is 3000 a month. My wife is a stay at home mom. Thanks

[adamjlaw]

By the way my mortgage on the first is 1400 a month the second 450 the third 4000. My income over the last six months is 3000. Unemployed for a while and got my first paycheck last week.

[B12]

If only.............we could get a lien removed because the asset is not worth as much as the loan. Unfortunately, it does not work that way. I am sure, soon, you will be getting a lot of good advice on this post.

Question, though. Are you sure the SBA loan is a lien on your house? It seems that the SBA would not use a house that is already encumbered to secure a loan.

[lrprn]

Welcome to BK Forum, adamjlaw - glad you found us.

I currently have 115,000 in unsecured debt. I also have a first on my house for 271,000 a second for 50,000 and a third which is an SBA loan for 330,000. The house is currently worth about 260,000. The unsecured debt and sba loan are from a business that failed, ...

You have a great deal of business debt mixed with your personal debt. Be sure to fully explain all this next week when you meet with the lawyer. And be prepared to produce your business records as well as your personal records.

Suggest that you meet with at least 2-3 more bk lawyers in your area for sure. Your situation is a difficult one and you need excellent legal help to be sure you make the best decisions possible for you and your family.

Would it be at all possible to get the 2nd and or 3rd on my house taken off due to the actual value of the home.

No. Once you sign on the bottom line, the debt is yours. Some creditors might work with you on a refinance deal, but given your current debt load, that is not very realistic.

Also how does the repayment plan work. I am teaching now and my take home pay is 3000 a month. My wife is a stay at home mom.

I assume by repayment plan, you are speaking of Ch 13 bankruptcy. Frankly given the amount you are earning and that your wife isn't working, no matter what state you live in, I can't see how you are going to have enough disposable income to support a Ch 13 plan that tackles the amount of secured debt you have. Discuss this with your lawyer and others as well.

Forgive me, but I need to ask you a hard question. As hard as this may be for you and your wife to think about, have you considered surrendering your home in a Ch 7 bankruptcy and starting over in a rental for a few years to rebuild your credit? Sometimes the financial holes we dig for ourselves are just too deep to climb out of and keep assets, so we have to open the door to discuss possibilities that we would rather not be on the table. During your meetings with lawyers, bring up this as a possibility to see how the lawyers each balance the possibility of keeping your home vs surrendering it to foreclosure.

Hang in there - keep asking questions - we'll help you sort things out as best we can. We're here to listen, support you, and enjoy the good times together that will come again in the future too.

[bkquestions]

What is the home worth?

[adamjlaw]

Chp 7

Yes, we have thought about chapter 7 already. I try to not be too emotionally attached to material posestions so I am really not that upset if we move. We bought our house as a fixer upper and havent' finished working on it yet. It is worth 260,000. I found a rental about two blocks away from where we live now and it is about 500 a month less then the mortgage payment I was paying. The owner is very nice, the house is completly remodeled. I am actually excited about this because with the extra income we can start saving money and set up a 403(b) retirement account. I was in a good situation before the business and I want to work to get back there. I hated having to watch every dollar I spent to ensure I could make the mortgage payment every month. It is too stressful and that reflects in the relationship with my wife. If it is too hard financially to do a Chapter 13 then 7 is an option.

[rrockinggramma]

Have your lawyer check into a Pond Motion. It works in some districts but not in all and would strip your leins back to the value of the home. It is complicated and I am sure that the lein holders that are stripped can and will object but with a good attorney you might have a chance.

Narrowing The Issues: New Requirements

In his experience with the court, Judge Ninfo noted that many times the pleadings in a Pond motion have not included certain information that might be helpful in both preparing for trial and in determining whether a pre-trial conference might be beneficial.

The court then listed several matters that should be included to expedite a Pond motion: (1) the original date and purchase price of the residence; (2) the current assessment for the residence; (3) information regarding any appraisal that was obtained at the time the mortgage to be avoided was approved (including who prepared the valuation, the indicated value and who obtained it); (4) relevant facts and circumstances that might justify why the claimed fair market value is less than the original purchase price of the residence (where applicable); and (5) an explanation for any disagreement among the parties' appraisers (square footage, lot size, number of rooms, etc.).


keep us posted!