losing home while in Ch. 13

[JMW]

We filed Ch.13 in April, 2007. At that time, we wanted to keep our home, so we reaffirmed the 2 mortgages. Since then, we have fallen seriously behind on our mortgage payments (5 mos.) and no longer want to keep the home, since we obviously can't afford it. We already tried a loan modification and were denied. Three months ago, the mortgage company filed a Motion for Relief from Automatic Stay against us. They said they can't foreclose on us until our Ch.13 is over. 1st mortgage is $82K, 2nd is $63K- house is worth probably around $140K. My question is: should we do a Short Sale or Deed in Lieu of Foreclosure now or just wait until our Ch.13 is up, and let them foreclose on us?
Thanks.

[justbroke]

We filed Ch.13 in April, 2007. At that time, we wanted to keep our home, so we reaffirmed the 2 mortgages.

Just so that you know, there is no reaffirmation in a Chapter 13... mostly because a Chapter 13 is considered a "pending" bankruptcy. It would be useless and serve no purpose to reaffirm any secured debt in a Chapter 13.

They said they can't foreclose on us until our Ch.13 is over. 1st mortgage is $82K, 2nd is $63K- house is worth probably around $140K. My question is: should we do a Short Sale or Deed in Lieu of Foreclosure now or just wait until our Ch.13 is up, and let them foreclose on us?

Your attorney will do a Motion to Modify Confirmed Plan and inside that Motion would ask that the property be surrendered. It is important that your attorney does it correctly by asking to surrender the vehicle as part of the modification of the Confirmed Plan.

The argument, even though you surrender the home, will be whether the deficiency that is created, becomes unsecured.

[JMW]

Thanks for your reply.