Analysis of our situation please

[chinup]

Any input would be appreciated.
Fiance and myself bought a home 3 years ago.
Loans: 1sts -$372k, 2nd $94k. Present home value $250k

Wife cannot work FT as our son was dx with autism and she now only works PT.

Credit card bills: 35k

Cars: $23k each leftx2=46k total

Income $5000 a month net.

We are contemplating BK13. She has cards in her name the same as I. The home was bought with both of our names on the title, but not married.

So do we each have to file or can we file together?

Now I know the credit card companies will settle for 35% of the total and we can actually pay that but the 2nd mortgage is killing us.

We would like the credit cards and 2nd to be gone.

We tried a loan mod with Countrywide but they only were willing to reduce the 2nd by $50.00 FIFTY!!!! on a $3000 a month note.

So we are stuck with what we can do and want to do.
We are thinking that we can strip the 2nd and credit card debt with a 13?????? Correct?

Or we should setting with the cc companies and then continue to fight Countrywide for another load mod w/o filing.

thoughts
Thank you

[HHM]

Yep, your situation is crying out for a chapter 13. Don't waste time and money trying to settle.

Since you are not married, you can't file a "joint" BK, but you can file two separate chapter 13's and request that they be jointly administered. But, you both need to file since you are both on the house, reason being, that is how you will get the lien strip.

If your house is really that upside down, you should consider simply walking away. If you are correct, you are negative just on the 1st mortgage by $120,000, the real estate market is not going to come back any time soon to eat up that kind of negative equity.

Side note, I am not sure why people think that settling is something that should be done instead of BK. IMHO, settling is something you do because you CANT file BK. In essence, debt settlement is the LAST RESORT. It is very expenses, ruins your credit far worse than BK, and there are income tax consequences.

You have already answered your own question, if settling CC debts won't solve the problem ("the second mortgage is killing you"), then settlement is a non-starter).

[helluvaman]

I'm new here, so i can't offer much insight, but I'm wondering how you know the CC companies would settle for 35%.
I'm contemplating a BK myself, but if my CC's would take 35%, I could avoid it.

[chinup]

Good information, thank you.

To put in more perspective and accuracy.

1st $372k $2143 a month
2nd 94k $850 a month
Home value -around 250-275
Property taxes not included above

Monthly gross income $6000
taxes/ health insurance/etc brings it down to $4710 a month

No back state/federal taxes owed

We do own about 15k in property taxes
3 months behind in mortgage

40k in unsecured cc debt

Problem is, all of our income will go to the chapter 13plan and nothing left over for surprises down the line.

In an idea situation we would file 13, strip the 2nd, and have reasonable payments on the remainder but according to the calculators I have used for 13 repayments, we do not qualify for a 13.

Any thoughts?
thanks

[liz417]

Good information, thank you.

To put in more perspective and accuracy.

1st $372k $2143 a month
2nd 94k $850 a month
Home value -around 250-275
Property taxes not included above

Monthly gross income $6000
taxes/ health insurance/etc brings it down to $4710 a month

No back state/federal taxes owed

We do own about 15k in property taxes
3 months behind in mortgage

40k in unsecured cc debt

Problem is, all of our income will go to the chapter 13plan and nothing left over for surprises down the line.

In an idea situation we would file 13, strip the 2nd, and have reasonable payments on the remainder but according to the calculators I have used for 13 repayments, we do not qualify for a 13.

Any thoughts?
thanks

Hi there,

I think you have too much house...your house payment eats up about 45% of your take home pay...way too much...that that doesn't even include property taxes! What do you mean, "you don't qualify for a ch 13?", it is important to interview a 3-4 BK attorneys because you need someone with experience to write you a good ch 13 repayment plan with a little "wiggle-room"...
Good luck!

[StartingOver08]

Your house is too upside down to consider saving. You should walk away from it altogether. Even after you file and successfully strip the 2nd, you are still house poor. Form your post, I can't tell if the $15k in property taxes is one year of taxes or two years, but if you add that amount to even just your first mortgage payment, you will still struggle.

Use the BK as an opportunity to correct these debt errors. It is your chance to get a fresh start and get out from under this hugely upside down payment. You will not believe the relief you feel once the debt is gone.

It won't hurt to start over again with a rental and get your budget under control so that your next home purchase will be a payment you can easily afford.

[fltoo]

Agreed Starting Over. If it were me, I would walk away from this house and loan.

See if you can use the mortgage payment to qualify for a chapter 7, though.

You can jointly file a chapter 7, wiping out your debt and deficiency from the house.