I borrowed against my primary residence to purchase investment properties (yes I know this was a bad idea)
$500K at 4.875% resets in jan 2010
$150K at prime
$100K at prime
current value $614K
several short sale deals in progress (after almost a year working with the banks).
I went to see a BK attorney and she suggested that I not do the short sales because I could be subject to taxes or a potential deficiency judgment none of which can be discharged in BK.
She suggested I file a Chapter 13 which would do a few things for me:
1. I could keep my home by stripping or discharging the 3rd mortgage
2. surrender the investment properties without being subject to taxes
3. discharge my unsecured line of credit loan ($26K) at the end of the 5 year plan
I would also have the option of converting to a 7 later if for some reason I did not want to keep the home. Now this all sounds good and yes I really want to keep the home if I can and if I am able to strip off the 3rd I would be able to afford it not to mention if the market ever did rebound I might see some equity return after the chapter 13 plan is completed.
I do have some concerns:
1. how a BK is going to affect my ability to find employment
2. what happens to the cash I have in bank accounts currently. I only have 1 unsecured debt which is from a $26K personal line of credit.
3. what happens to any increase in income, tax refunds, bonuses, etc
4. if all my disposable income is suppose to fund the plan then how do you build up a surplus for those rainy days?
My goal is to keep the home and from what I have read on various forums - some things can occur once I file:
1. any loan mods that were approved before filing could be cancelled
2. any credit cards (I payoff bal each month) I currently have could be closed
I was hoping people on this forum could address some of my questions/concerns. Has anyone been able to get a reasonable loan modification or interest reduction after you filed for BK? what were the timeline and terms? it seems like the variable in my case would be the mortgage company and whether or not they will offer me a loan modification to lower my payments and extend my terms to a 30 or 40 year fixed.
appreciate your help!
$500K at 4.875% resets in jan 2010
$150K at prime
$100K at prime
current value $614K
several short sale deals in progress (after almost a year working with the banks).
I went to see a BK attorney and she suggested that I not do the short sales because I could be subject to taxes or a potential deficiency judgment none of which can be discharged in BK.
She suggested I file a Chapter 13 which would do a few things for me:
1. I could keep my home by stripping or discharging the 3rd mortgage
2. surrender the investment properties without being subject to taxes
3. discharge my unsecured line of credit loan ($26K) at the end of the 5 year plan
I would also have the option of converting to a 7 later if for some reason I did not want to keep the home. Now this all sounds good and yes I really want to keep the home if I can and if I am able to strip off the 3rd I would be able to afford it not to mention if the market ever did rebound I might see some equity return after the chapter 13 plan is completed.
I do have some concerns:
1. how a BK is going to affect my ability to find employment
2. what happens to the cash I have in bank accounts currently. I only have 1 unsecured debt which is from a $26K personal line of credit.
3. what happens to any increase in income, tax refunds, bonuses, etc
4. if all my disposable income is suppose to fund the plan then how do you build up a surplus for those rainy days?
My goal is to keep the home and from what I have read on various forums - some things can occur once I file:
1. any loan mods that were approved before filing could be cancelled
2. any credit cards (I payoff bal each month) I currently have could be closed
I was hoping people on this forum could address some of my questions/concerns. Has anyone been able to get a reasonable loan modification or interest reduction after you filed for BK? what were the timeline and terms? it seems like the variable in my case would be the mortgage company and whether or not they will offer me a loan modification to lower my payments and extend my terms to a 30 or 40 year fixed.
appreciate your help!
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