Go into Foreclosure AFTER Confirmation

[1aliasfan]

I have been scouring these threads and just don't see what I am looking for.

We were confirmed last November. Our house is paid outside the bankrutpcy. Can we make the decision to let the house go into foreclosure and find a place to rent, let the house be sold and pay the balance as unsecured?

We would have to have 2 payments missed so we could pay a deposit and a new rent payment. The rent payment to fit a 4BR home where we live in our school district would be the same as our house payment. We are not doing this to save money, we are doing it to get away from the cost of repairing our home and problems with a neighbors.

[mynameainttracy]

We are 2 yrs into a ch. 13. We also paid the mortgage outside the plan. We have decided to walk away and have been approved for a rental. Our attorney has assured us that we can simply walk away and let it go into foreclosure without the risk of having to pay anything else. I am just hoping that it works out that way.

[lrprn]

I have been scouring these threads and just don't see what I am looking for.

We were confirmed last November. Our house is paid outside the bankrutpcy. Can we make the decision to let the house go into foreclosure and find a place to rent, let the house be sold and pay the balance as unsecured?

We would have to have 2 payments missed so we could pay a deposit and a new rent payment. The rent payment to fit a 4BR home where we live in our school district would be the same as our house payment. We are not doing this to save money, we are doing it to get away from the cost of repairing our home and problems with a neighbors.

Here's the risk. If you walk away from the house, your lawyer will have to redo the Means Test and Schedules to see if giving up the house and starting to rent will significantly increase your disposable income.

If your disposable income does significantly increase and can't be offset with higher expenses since you originallyfiled , then unless you are in a 100% payback plan, your payments could increase accordingly for the remainder of your plan. Of course, you won't be struggling to support a house that is sucking you dry, so that's a huge benefit that may outweigh anything else.

Talk over your idea to surrender the house with your lawyer. Be sure that you clearly understand all the consequences of doing so.

Hopefully renting will end up being a wash and nothing will have to change in your plan.

[Billssuck]

I am right there with you. We are paying our mortgages outside of our plan and are planning to modify our chapter 13 to surrender the house due to a decrease in income since we filed. When I talked with my lawyer, he never mentioned anything about paying back a balance as an unsecured if the house sold at auction for less than we owe. I will ask him when we do our ch13 modification on May 5th, but I don't think this happens. The bank got the house and I think that's all there is to it.

[1aliasfan]

Talked to my lawyer last week. Since we pay the mortgage outside the plan, technically we can do whatever we want, but he operates under the "tell the trustee everything and it causes less problems later" principal. I believe we are going to let the bank have it back, using the first missed payment for a deposit on another place and the 2nd missed payment as the 1st months rent. IF we stay until we HAVE to leave, the trustee may come after us for the extra money and it is not worth it. If we stay at the same rent, we don't have to do anything. If we are a couple hundred less, he said he would send and email to the trustee and recommend no change in order to offset the cost of the taxes (which I have to change anyway). Right now we are struggling with wanting a property in the country and an increase in gas cost, which the trustee may not allow. (he said the mortgage company would foreclose and if they did not break even, the remaining portion would be added to the C13 as unsecured and they would get their portion. We would not need to modify our payments.)