House questions

[Billssuck]

Hello...

We are planning on filing on May 28th and my attorney hasn't said much about our house (nor have I really asked him yet either). Here's the deal:

The house has a first mortgage and a HELOC of which the balance is about $242K total. When we got the HELOC about 4 years ago, the apprasied value was $265K. As everyone knows, the house probably isn't worth that now nor the $242K that we owe on it. Should I pay to get an appraisal or just get a CMA through a real estate agent? And, if I get the CMA, what do you tell them you need it for? Do you admit you're filing BK or do you just say you're contemplating selling and just want to know what it would sell for? As far as an appraisal goes, I really don't want to spend $300 right now for one if I don't need to and I've heard they are usually higher than the actual value.

Secondly, on the house, our attorney has recommended to NOT reaffirm our house if it is asked. I completely agree because it will take some time to get back in the black with equity and it would only hurt us financially more in the long run. What are your takes on that?

Additionally, we are probably going to just be below the median which means we could either go 7 or 13 depending on whether we have DMI. I think we'll have a minimal amount of DMI but I don't know which way I should consider if it is offered. Right now, after our initial consultation, the attorney thought we'd file CH13 based on preliminary figures given. If you were given the choice of a 7 over a 13, would you take it and what are the pros and cons of both? I know these are some basic questions, but I'd like to know what others on here think about it.

If it helps, I live in Missouri and MO doesn't allow federal exemptions.

Any advice is appreciated!

[Billssuck]

Another thing....

Oh yes, the first mortgage balance is $158K and I really think it is worth more than that so we can't strip the lien on the HELOC....

[eddiep]

Chapter 7 is what everyone prefers, unless you have a moral obligation to repay your exhisting debt or if you have assets that can not be protected. In chapter 13 you have a repayment plan that lasts between 3 and 5 years, you keep all your assets. in chapter 7 you walk away from all your debt but any assets you have that can not be protected will be liquidated to repay your creditors. I understand that you do not have any equity in your home but if you did you would want chapter 13.

[StartingOver08]

Get a CMA first, since they are free. You do not have to tell the agent that you are filing BK, but do tell the agent that you are looking for a quick sale value and that the comps need to be sold no more than 90 days old. Tell the agent to give you a net proceeds sheet too so you know your expenses of selling. This free CMA will give you a better idea of value, or in reality, your negative equity position.

As to the Ch 7 or 13, if you are behind on the house and other secured assets that you want to keep a 13 makes sense. If you are current on the house and not reaffirming - go for the 7. This is the time to plan exactly what you want out of this BK....

[Billssuck]

Thanks...we are current on the house and honestly I'd be fine if we lost it in the BK. It's too much money and it's too big and a huge tasking to take care of. However, my husband wants to "save face" by keeping it and to not go through the public embarrasment. If we're current on the house and file 7, do they usually keep you in the house? It would make sense to do this since they are getting paid each month.

Thanks for the info on the CMA. I will call a realtor tommorrow with the specifics mentioned above for the report.

[StartingOver08]

Make sure you get an experienced Realtor...the newer ones have a tendency to price the property too high.