To file or not?

[bkstuff]

I feel so irrational about trying to decide if we should file Ch13 or not. We have previously been through this before (ch 7) because of a layoff and now we in the same situation again. However, we are both working now, but the losses in the past had us using home equity line to survive and keep up with bills. So, even though we put down 20% cash into our home 3 years ago....that money is gone and more because of the housing market.

So, we could strip the 2nd mortgage, more than likely. But we would still have a big house payment....but we could probably get by if filing Ch 13 to get caught up on mortgage.

We would be in a 5 yr plan - this is what really scares me. We have two teens who will both be driving within 2 - 3 years, respectively. I know that means cost goes up for insurance, etc. And then there is college! yikes. We have really great students, thank god. I just don't want to fail a Ch13. On the other hand, really are only option is to let the house go (biggest expense for us) and then we would have to negotiate some how with our 2nd mortgage for a payoff (this is a credit unions and we know they will fight hard to have us pay off). How much could they garnish if they decide to do that? UGHHHH! I remember someone saying, "they can't come and kill you".

How did you all decide to file ch 13 instead of letting a house go, or some other solution?

[overspent]

Just like you, I am still trying to decide what to do. My house value is about 15K below my 1st mort, 50K HELOC so chapter 13 will strip the HELOC and the 35K ccards put in repayment plan. I could try to get a mod on my first then file chapter 13. Another route I could take is wait for the foreclosure date then challenge the right to close since my tiltle chain is not clear I can prolong this fight and settle with the CCard companies. I just sit back wait for the NOD and the sale date then proceed.

In your case, I would look at how much the house it's worth, whether it's worth saving, how is the rent. I know it's really cheap in Van couver ( I am Portland). Work out budgets for all possible scenarios. Depending on the type of your mortgage, you could stay in the house a long time after defaulitng. That saves a lot of cash.
Good luck in what ever you decide.

[momofthree]

Have you already attempted a home loan modification to lower your monthly payment?

We chose to keep our home because we qualified for a HAMP modification that lowered our interest rate to 2% for 5 years, which lowered our payment by $600 a month, making our house payment comparable to renting a similar property.

Now we've filed ch.13 to strip our 2nd lien, so although we are still underwater (by about $20k-$30k), we have an affordable payment (31% of income), and our home will be completely paid off and lien-free in only 13 years.

[bkstuff]

Yes, we are working through a Mod right now. In fact, the lawyer we spoke to recently suggested the get the Mod done, then file CH 13. Our Mod is barely helping our payment (about $70/month difference...and it is a trial Mod) - this is because we were just barely above the 31%.

Thanks for suggestions everyone~

[espo1357]

Have you already attempted a home loan modification to lower your monthly payment?

We chose to keep our home because we qualified for a HAMP modification that lowered our interest rate to 2% for 5 years, which lowered our payment by $600 a month, making our house payment comparable to renting a similar property.

Now we've filed ch.13 to strip our 2nd lien, so although we are still underwater (by about $20k-$30k), we have an affordable payment (31% of income), and our home will be completely paid off and lien-free in only 13 years.

you are in a great spot. I am over 100k underwater, and filed a 13, but I would rather just keep the home (depends on the HAMP mod, a dec. is going to be made shortly) because I don't want to put down another 40k for a new house, and it is about the same to rent.

I think the 2 percent and then a 3, 4, and settle at 5 for the life of the loan is going to be a good deal.

if they don't approve the hamp, however, I will leaving the property for sure.

[Whittier]

you are in a great spot. I am over 100k underwater, and filed a 13, but I would rather just keep the home (depends on the HAMP mod, a dec. is going to be made shortly) because I don't want to put down another 40k for a new house, and it is about the same to rent.

I think the 2 percent and then a 3, 4, and settle at 5 for the life of the loan is going to be a good deal.

if they don't approve the hamp, however, I will leaving the property for sure.

If HAMP isn't approved push for an-in house MOD. I've met people who have the same as the waterfall plan 2% - 5yrs; 3% - 6yr; 4% - 7yrs and 5% 8yr - 30 or 40 yr.