Advice needed

[shanidane]

We are going to be filing bankruptcy soon. We can only file a 13, we make over the means for chapter 7. Here is my question: Is it worth while to keep my house? We have no equity, we owe 114,000 on the 1st mortgage and 39,000 on the home equity loan. That totals 153,000. Our home is worth 130,000. Should we let our home go as well since it is not worth anything and get out of it now while we can or stay in it? We are current on both mortgages. Any advice would be greatly appreciated.

[kmb]

IMO, if you can afford to keep your house, I would do that. With the market the way it is, and the fact that the mortgage industry is getting tougher with its standards, it might be a long time before you can buy another one. Obviously it depends on your situation though. I have two children, have a nice yard, live in a good school district and I couldn't imagine moving us all to an apartment for the next 5 years. Plus, if you can afford to make the payments, do you want to lose $20K because you're upside down right now? The market will have to turn someday, and who knows, it might be when you've completed you BK and you can then actually sell it for a profit.

Again, just my two cents. Good luck.

[southernbelle]

My personal opinion to this mimics kmb's. It seems like after filing BK, it might be hard to find somewhere decent to live without lots of red tape. Most people see BK as a very bad thing and portray you as financially irresponsible after you file, even if you file Ch. 13.

I own my own home with 2 mortgages and it would be lots easier if I just let it go, but I'm not upside down in it and the equity is almost nothing, but at least it's in a decent area and I'm current on my payments.

Also consider the effect of a safe area with good schools if you have kids. BK might limit where you choose to live.

I also would like to buy another home in the next 2 years and don't want to deal with a foreclosure on my credit report. Again, I'm sure someone else will have another opinion on this, but those are just my two cents worth and you must decide what to do by talking to your family and weigh the advantages and disadvantages of letting it go.

Good Luck