Chapter 13 after forclosure

[Bluetek]

Quick question. I lost my house in March and haven't heard anything from the mortgage co since. I have about 150K in unsecured debt - 75% business - and the mortgage was 240k. The house sold at auction for 138k. This is in Arizona and was my primary residence for 6 years.

My intention is to repay my creditors 100%. When trying to calculate how much I owe do I include the whole mortgage amount, the deficit amount or none if the bank didn't seek a judgement?

I didn't get a 1099 from the mortgage co.?

[justbroke]

Arizona is a non-recourse State. You may not owe any money to the creditor unless the mortgage was not a purchase money loan. If so, then why would you file Chapter 13? With your numbers, you could file a non-consumer Chapter 7 and be "out of" bankruptcy within 4-5 months. You could, if you chose to, then pay back your creditors with NO legal responsibility to do so. If you get into trouble in the future, you could stop paying. The creditors would have no expectation of being paid, and you'd be doing them a huge favor.

Which then begs to ask the question, why do you want to pay back all the creditors?

(As for the 1099-A/C, you probably won't get one until the tax year ends in December. Expect to receive a 2010 IRS FORM 1099-A/C sometime in January 2011 or later.)

[Bluetek]

I guess I'm not sure what to do. The mortgage was a refi. What qualifies a purchase money loan - just the first loan you took out to buy the house?

I have talked to three atty's and got different stories from all of them - I'm more confused after meeting with them. One of them said the whole mortgage, one didn't know, and the last said the deficiency amount. Which one is correct?

I got three different scenarios about how to file as well. So, more confused than ever and I want to figure this out a bit before anymore meeting with atty's.

[Bluetek]

I found this online at ezinearticles dot com (sorry I can't post links yet):

Arizona Real Estate Law - Understanding Arizona's Anti-Deficiency Statutes

Significantly, even if the loan is not a purchase money loan, the lender's election to utilize non-judicial foreclosure on the deed of trust renders it non-recourse by operation of law.

So, in a non-judicial foreclosure the amount owed the creditor is nothing? How does this look in BK (13 or 7)?

I think it was non-judicial how can I be sure? It's non judicial if its a trustee sale right?

[justbroke]

So, in a non-judicial foreclosure the amount owed the creditor is nothing? How does this look in BK (13 or 7)?

Yes, the amount owed is nothing. It doesn't look like anything in a Bankruptcy because you wouldn't owe them anything. Even if it was a judicial foreclosure with a lawsuit for deficiency, the amount would be discharged in a Chapter 7, and would be general "unsecured" debt in a Chapter 13.

I think it was non-judicial how can I be sure? It's non judicial if its a trustee sale right?

If you have a Deed of Trust, then it will usually be foreclosure by a Trustee sale, based on a Power of Sale clause in your Deed of Trust (Trust Deed). If it's a "Mortgage" (the security instrument reads Mortgage or Residential Mortgage), then it will usually be done by a lawsuit for foreclosure (judicial). Arizona is mostly Trust Deed (Deed of Trust with Power of Sale) so you are likely to face a non-judicial foreclosure and hence the "non-recourse" law kicks in.

[Bluetek]

Thanks for the clarification. I'm still a little confused about which to file 13 / 7 and I'll be setting up more atty appointments next week.

Yes, the amount owed is nothing. It doesn't look like anything in a Bankruptcy because you wouldn't owe them anything

I pulled out everything I have and it was a trustee sale - so, they are listed as a creditor with a zero balance?

[justbroke]

I pulled out everything I have and it was a trustee sale - so, they are listed as a creditor with a zero balance?

You can list them if you're unsure. I would probably list them as $1. However, you really need not list a creditor you owe nothing. But, in this case, if you're unsure... I would probably list them.