Mortgage Outside Plan...Reaffirm?

[TooMuchCredit]

Well, I finally filed last week. My mortgage is to be paid outside the plan, but my car is in the plan in hopes to get the interest rate down from 9% to 4.75% and the term to 60 months from 72. (Car payment would actually be about the same, but I'd save 9 months of payments - have already paid 3).

Anyway, my mortgages are outside the plan. I am wondering if their is any chance my Home Equity lender (Ditech/GMAC) would lower my interest rate. It's currently 12.5%. My 1st is at a more reasonable 5.625%. I wonder if they would be willing to lower to that rate given that if I surrendered the house, they would get nothing. Lien stripping is not done in my district (N. Georgia). But I had an appraisal done before I found that out. I could show to them they would get nothing. Think they'd go for it?

[spearmint]

How do they decide if your mortgage gets paid in the plan or outside the plan?

How can you LOWER your car interest rate while in the plan? I thought interest rates were always higher while in BK.

[TooMuchCredit]

How do they decide if your mortgage gets paid in the plan or outside the plan?

How can you LOWER your car interest rate while in the plan? I thought interest rates were always higher while in BK.

It's up to the district if secured items are paid inside the plan. Usually in my district mortgages and cars are paid outside the plan. However, I believe since my lawyer is attempting to get the interest rate lowered and term shortened, it has to be paid inside the plan. While they cannot cram down on a newer vehicle, they can lower the interest rate to as low as 2% above prime I think. That's where the 4.75% comes in. The amount of principle paid remains the same.

[spearmint]

It's up to the district if secured items are paid inside the plan. Usually in my district mortgages and cars are paid outside the plan. However, I believe since my lawyer is attempting to get the interest rate lowered and term shortened, it has to be paid inside the plan. While they cannot cram down on a newer vehicle, they can lower the interest rate to as low as 2% above prime I think. That's where the 4.75% comes in. The amount of principle paid remains the same.

That's very interesting. I didn't realize they could or would do that.

I've read some message in this forum from people who got vehicles while in Ch13 and they paid interest rates in the teens but never mentioned trying to get the rate lowered. I must keep this in mind because I am about to change my vehicle before I file.

[TooMuchCredit]

That's very interesting. I didn't realize they could or would do that.

I've read some message in this forum from people who got vehicles while in Ch13 and they paid interest rates in the teens but never mentioned trying to get the rate lowered. I must keep this in mind because I am about to change my vehicle before I file.

I bought my vehicle just over 3 months before I filed. It remains to be seen if I am successful in getting the vehicle's rate lowered.

[spearmint]

Best of luck to you. Hope you get it lowered. Please let us know.

[relief13035]

CitiMortgage lowered my HELOC to 2.75% - that was very much appreciated!

[IBroke]

How do they decide if your mortgage gets paid in the plan or outside the plan?

How can you LOWER your car interest rate while in the plan? I thought interest rates were always higher while in BK.

Your interest-rates are higher on the "free-market", but the Judge has no interest in making it more difficult for you. See, you already HAVE the loans that would get a lower APR - you're not obtaining NEW credit. If the APR is too high, your payment might be too high and the creditor might geht nothing because you simply can't afford it. That's why you're in Chapter 13 - to pay back SOMETHING. If you would pay back everything, no need for BK. If you couldn't afford anything, you file Chapter 7. CH 13 is the middle-way and agreat solution to save your "essentials"..

Today, I'll have an attorney-appointment together with my mother. We will also ask about paying the 1st mortgage outside the case because we would be current when filing. I read on an attorney's website that current mortgages could be paid outside. The first mortgage sent us a great offer to get back on track but the second mortgage doesn't want to negotiate at all, although their loan currently is 100% UNsecured. Well, now, they will end up empty handed and will be "stripped" - at least from our side. Maybe they don't want a settlement and prefer a write-off or some other federal bonus instead - who knows?

It would be hard for us to come up with the additional 8.8% trustee-fee for the loan - that would be an additional $250/month we would have to swallow..

We also have a joint car-loan we would like to have modified. 910-day rule makes cramming-down impossible. We currently made 8 of the 36 payments, the loan is current/never late BUT has a 23%(!!) APR. A modification to the 36 months of the plan AND a reduction of the APR would certainly be more affordable than what we are paying now - even with the 8.8% fee.

[TooMuchCredit]

CitiMortgage lowered my HELOC to 2.75% - that was very much appreciated!

Did you have to ask them for a reduction or did they just do it automatically?

It's my understanding in a Ch. 7 you have to reaffirm, but in a Ch. 13 thre is no reaffirmation.

I am wondering if I should contact Ditech/GMAC and ask for a reduction or just sit back and hope they lower it on their own.

[deerme]

My HELOC was one of those that was prime plus a certain % (can't remember how much) and it was getting harder to make interest only payments.

So I called them (I pay mortgage and HELOC outside of my CH 13) to see what my options are. Well they converted it to a fixed loan @ 6.25% that will be paid in full in 6 years! Plus, I had been really behind in my payments so they forgave all that interest and basically started me fresh! Very nice people...now I have a payment I can afford again and I will be able to add to it once my CH 13 payments stop!! Only (4) more payments and I am done!!

All I had to do was ask! It was worth it for me!

Good luck!

[deerme]

I should also add that I was about 9 months behind in payments...that was a lot of interest they forgave! My HELOC was originally with Countrywide (same as my first mortgage) but they quickly sold my HELOC after I filed CH 13. Then I was sold a second time to the company I am currently with.

The only contact I had from them was a letter telling me that they took the loan over. Nothing more until I called them. I was amazed how nice these people are!! They were a godsend for me!

I think it is worth a call. They can't call you because of the BK, but you can certainly call them.

One more thing...my HELOC is to the tune of $52,000! So this gives you an idea of how much interest they forgave!

Bottom line is that they are getting paid...I wish more companies were like this!