Moving Out of State

[ccfriend]

Just a brief run down....I am married but my husband did not file with me. We are thinking of moving out of state to be closer to family. I filed in June and was confirmed in Aug of 2008. So I am about 8 months into my plan. My question is this...what are our options for our house? Can we sell it in a chapter 13? We have two mortgages and would have to come to the table with money. Can we lein strip even though when we filed we didn't request this? Can we walk about from the house? Anyone with any ideas of how we could make this work without having to come up with $15,000 to sell would be great!
Thanks for your help!

[justbroke]

Just a brief run down....I am married but my husband did not file with me. We are thinking of moving out of state to be closer to family. I filed in June and was confirmed in Aug of 2008. So I am about 8 months into my plan. My question is this...what are our options for our house? Can we sell it in a chapter 13?

Yes, you can sell your home, but you need to make a Motion to basically actually sell it.

We have two mortgages and would have to come to the table with money.

Okay, this is starting to not sound good.

Can we lein strip even though when we filed we didn't request this?

This depends greatly on one major factor. When you filed, what was the appraised value of the home? Valuation is always based on the value of the property at the time you filed. If your home was worth less than the first mortgage on the day you filed, and you got an appraisal on or around the date you filed, you could possibly lien strip the second. You may have some issues selling with the second lien there, but my humble guess is that this is overcome anyhow, even though you stripped it and then sold it.

Can we walk about from the house? Anyone with any ideas of how we could make this work without having to come up with $15,000 to sell would be great!

There is nothing in the Code to prevent this. Technically, you (your attorney) would submit a Motion to Modify Confirmed Plan. In that new Plan, would be your intention to surrender the property. Any deficiency caused by the subsequent foreclosure and sale, would become an unsecured claim.

I think the latter choice is better and is more likely to get approved.

[Gerry]

Technically, you (your attorney) would submit a Motion to Modify Confirmed Plan. In that new Plan, would be your intention to surrender the property. Any deficiency caused by the subsequent foreclosure and sale, would become an unsecured claim.

This is good to know. If I have to do the same, I wondered if I'd have to ask for a dismissal of the currrent 13 and immediately refile a new one. I'm glad to hear it's a much easier process than all of that.

[justbroke]

This is good to know. If I have to do the same, I wondered if I'd have to ask for a dismissal of the currrent 13 and immediately refile a new one. I'm glad to hear it's a much easier process than all of that.

In theory, that's how it works. In practice... Bankruptcy Districts are so, apparently, autonomous to a fault... that different Districts behave differently. There are still Districts that believe that you can't lien strip a wholly unsecured junior mortgage's lien!!!

So, I'll add this... your mileage may vary. However, modification of a Chapter 13 Plan is a reality and while it isn't done often, the mechanism is there to make changes.

[filingin08]

We're in Northern Ohio

We were told we could NOT change the treatment of a creditor after we were confirmed. If we decided to walk away from the house, we needed to do it BEFORE confirmation. Otherwise, we would have to dismiss and refile.

[justbroke]

We were told we could NOT change the treatment of a creditor after we were confirmed. If we decided to walk away from the house, we needed to do it BEFORE confirmation. Otherwise, we would have to dismiss and refile.

Exactly what I'm talking about.

I wonder how they deal with a new car inside a Chapter 13, if they couldn't modify (alter) the amount of distribution to a creditor, if you replace the in Plan car with the new car?

In any event, there is caselaw on both sides and some Districts (Circuits) don't allow it, and some do.