walking away

[shelly66]

we filed our case yesterday and our attorney has 15 days to give the trustee our plan. Today we recieved the appraisal on our house.We owe $251,000 and it appraised at $100,000. My husband and I now think we should walk away, the neighboorhood has ngone downhill and even though we are stripping the 2nd we still owe $200,000. Is it too late we do not know what to do?

[lrprn]

Shelly, it makes perfect sense given the dollar figures you've shared to walk away from the house.

Since you filed without having the appraisal first, it sounds like your lawyer had to file an emergency 13 and now has 15 days to file the remaining forms. Am I right? If I am, what pulled the trigger to force the emergency filing?

To surrender your home as a part of your 13 plan, all your lawyer has to do is modify the forms to indicate you intend to give the house back to the lender. It's as simple as that.

One more question - if you give up the house, is your income still too high to file a 7? Were there other assets you were trying to protect by filing a 13?

[justbroke]

I like what lrprn wrote. It's not worth it... especially financially... to keep any home. My "threshold" for suggesting keeping a home (after a lien strip), is that it shouldn't be more than 10% underwater. You are at at least 100%. That is really a no brainer.

[shelly66]

I know it make sense to walk away but since the lawyer filed this past Thursday is it possible to make the change. We haven't had our meeting yet. I guesssince we were going to pay 0% to credit cards then that will change. But what about the rent payment will that amount be taken in to consideratoin.

[justbroke]

I know it make sense to walk away but since the lawyer filed this past Thursday is it possible to make the change. We haven't had our meeting yet. I guesssince we were going to pay 0% to credit cards then that will change. But what about the rent payment will that amount be taken in to consideratoin.

Yes, rent will be taken into consideration. It is usually based on the IRS Standard for your family size, and your specific county/State.

The specific allowances are located at the DOJ link following this.

http://www.usdoj.gov/ust/eo/bapcpa/20090315/meanstesting.htm

You would look at Section 4 "Local Standards" and select your Statet. it will then show the Counties and Family sizes and you get to use that number, along with the "non-rent/non-mortgage" expense category for utilities.

[optimistic1]

my house is worth nothing too, but Im not walking away, everyone I know is underwater, renting bites.

[sassiebaz]

Your lawyer can file an extension. Ours did and we got another 15 days for them to file all neccesary papers. I'd walk away if I were you. The only reason we haven't walked away...my Dad owns our house. In a way I wish he didn't, because we are even more stuck than if we had taken out the loan. We can't walk away, he'd be screwed!

[walkthaplank]

I would ask what your long term plans are, what rent would be in your area for a home you would be willing to live in, is your home in good condition and can you afford to stay in your home?

Any short to midterm plans to move? Work changes on the horizon?

If it costs the almost the same or perhaps even more to rent, you will be taking a monthly hit in your CH13 plan in that the trustee is really only likely to allow the IRS standard as an allowable expense in your plan. That standard is a joke in our area, I don't know about yours. Where I live, to be in a similar home in a similar neighborhood I'd be paying the same, if not slightly more to rent. Don't forget there will be an added tax liability due to the loss of tax deductions because you won't be writing off your interest every year.

If you can afford to stay where you are and you plan on being there long term, housing markets rise and fall, but ultimately rise. I'm not staying you should stay, but sometimes there is more to the decision than a straight dollars and cents based on the value today, or even expected value in the next 5 or so years.

[shelly66]

my parents are buying a brand new home and will rent it to use. Our neighboorhood has gone down hill, you can now buy a new home in our area bigger than ours starting at $170,000. We did not plan on staying here we have too many inconsiderate neighbors bringing the neighborhood down and don't care. We have done alot to the house and are torn. I just don't know if our attorney will let us walk away. We never thought buying our 1st home would become a nightmare.

[walkthaplank]

my parents are buying a brand new home and will rent it to use. Our neighboorhood has gone down hill, you can now buy a new home in our area bigger than ours starting at $170,000. We did not plan on staying here we have too many inconsiderate neighbors bringing the neighborhood down and don't care. We have done alot to the house and are torn. I just don't know if our attorney will let us walk away. We never thought buying our 1st home would become a nightmare.

You have a reasonable place to go. Your neighborhood is bad and getting worse. Your house is substantially underwater. At some point you will probably be inheriting the house you are moving to. Don't walk, run. You can amend your plan to include your house, your attorney won't care one way or the other.