Attempting Loan Mod After Filing 13

[helpme2010]

I just filed my chapter 13 one day before the trustees auctioned my house. This prevented the sale and I just received a new loan mod packet. The mortgage company also called me to see if I was interested in doing the loan mod (I got a call from an Indian call center).

I am going to fill out the loan mod packet in hopes that they will continue some type of loan mod program with me (and hopefully with an affordable payment plan). This will keep me in my house longer until I can get a job and rent a new place. I already let go of the house in a chapter 7 a few months ago and this is when they continued with the foreclosure process and set the auction date.

Any chances the mortgage company will work out a new payment plan for me or do you think they will just continue with the foreclosure?

[lrprn]

You didn't say if you filed your 13 with a lawyer or on your own. If you filed with a lawyer, he/she can help you sort out what's likely to happen if you pursue the loan mod under the circumstances you describe. If you filed the 13 on your own, then you're on your own to figure out what to do unless you retain a good bk lawyer now to help you.

One thing that confuses me....you said "I already let go of the house in a chapter 7 a few months ago...". Was your 7 dismissed and that's why you filed the 13? Why are you trying to keep the house now? Can you afford it if your lender won't do the loan mod?

[helpme2010]

You didn't say if you filed your 13 with a lawyer or on your own. If you filed with a lawyer, he/she can help you sort out what's likely to happen if you pursue the loan mod under the circumstances you describe. If you filed the 13 on your own, then you're on your own to figure out what to do unless you retain a good bk lawyer now to help you.

One thing that confuses me....you said "I already let go of the house in a chapter 7 a few months ago...". Was your 7 dismissed and that's why you filed the 13? Why are you trying to keep the house now? Can you afford it if your lender won't do the loan mod?

Irprn, thank you very much for your response.

1. I filed the 13 with my attorney, the same one who filed my 7.
2. My 7 was discharged a couple months ago. I did not reaffirm my house.
3. My goal would be to stay in the house for a while longer. I would be happy to make payments to my mortgage company to stay here longer, especially if it was a reduced set of payments, like with a 6 month forbearance plan.

My goal is to find a job so I will be in a better position to rent a new place (especially with the credit checks - if I am employed, I will look better to the renter).

My goal is not to get evicted before I have a job lined up.

I filed the 13 to prevent the trustee sale of my house and buy me more time to work out a temporary loan mod. The mortgage company sent me a loan mod packet and followed up with a phone call. I just completed it, so I have some time for them to review it while I am in the chapter 13.

If they send me a 6 month forbearance plan with reduced payments, am I reobligated in any way with the home if I miss payments or find a new place to live? Or did the chapter 7 wipe out all obligations to this home? I want to make sure if I leave the house and stop making payments, that the forbearance plan doesn't in some way stick me with owing the entire mortgage on the house.

[chicagoannie]

hm2010 - how did you manage to get a 13 without a job? I thought that plan needed income to fund it?

[helpme2010]

hm2010 - how did you manage to get a 13 without a job? I thought that plan needed income to fund it?

I filed the 13 in hopes to get the trustee sale stopped and get that extra time to work out a deal with my mortgage company. We filed and are moving forward. My mortgage company contacted me shortly after I filed the 13 asking if I wanted to move forward with the loan modification and I said yes. So the 13 may just be thrown out in a couple months, but hopefully I can get a plan worked out with my mortgage company. After the 7 was discharged, the mortgage company told me it was too late to get a loan mod approved (since I was just a couple weeks away from the trustee sale). Now with the 13 just starting, hopefully it will give them the extra time to review my docs and maybe give me a new forbearance plan.

[helpme2010]

oh fyi, I do receive unemployment insurance, so I do have income. Although small income.

[lrprn]

So let's see if I understand this. You filed Ch 7 and didn't reaffirm the house but now are jumping through all these legal hoops with significant long-term financial impacts to stay in it longer while you try to find a job, then hope that your mortgage lender will do a loan modification so you can afford to stay in the house until after your 13 is dismissed if you do find a job that can pay the mortgage? Do I have that right?

If I am right, please forgive me for being blunt. Your unemployment is going to end at some point and you're staking everything on finding another job that can make your current or modified house payment before that happens. Hopefully you will find another job *and* your mortgage lender will modify your loan too so you can keep the house. But if either of those doesn't happen, then you'll still lose your house anyway after throwing away thousands of dollars that you and your family desperately need to live on until you find another job. Plus you'll have taken the financial hit of filing two bankruptcies close together, and a dismissed bk is a harder hit than one that's finished successfully. You've played all your bk cards now - you have no financial safety nets left if you can't find employment soon.

Sometimes you have to take a really hard look at a thing you own and completely divorce your emotions from it. Look at the situation as coldly and unemotionally as possible. Remember that a house is just a thing, nothing more. Things are replaceable. Yours, your family's and loved ones' peace of mind are not. Those are far more important than a house.

If you are trying to keep a house that you really can't afford, why not get a fresh start and walk away from it? You didn't reaffirm the loan. There's no financial penalties to that choice. Rent for a few years, repair your credit as best you can, save a good downpayment, and start over again.

I'm genuinely not trying to be mean or cruel - I'm trying to raise the very real options that exist for you. Leaving your house behind may not be options you *want* to take. But if leaving the house behind gets you and your family back on your financial feet and into another house years sooner, isn't that worth considering?

[papie]

Am I reading this right?

You filed a Chapter 7, giving up the home, the Chapter 7 was discharged and an auction date was set.

You then filed a Chapter 13 to stop the auction. You know the Chapter 13 won't work out but filed in hopes of delaying moving out of your home.

The mortgage company sent you a modification packet. You stated, "I am going to fill out the loan mod packet in hopes that they will continue some type of loan mod program with me (and hopefully with an affordable payment plan). This will keep me in my house longer until I can get a job and rent a new place."

So, you want a modification, but you have no intentions on trying to keep the house. You basically just need somewhere to live, right? Not having a job, finding a place to rent would be difficult.

I have no idea what your mortgage company is going to do, but this doesn't sound like it would end well. You're banking on getting a job and renting somewhere before they boot you out, and you have no idea when that will happen. You've filed bankruptcy twice now and you're weaving a very tangled web trying to keep prolonging this. Banks are unpredictable, really. They might sit down and look at your modification packet, realize your Chapter 13 filing was dimissed, and set a new auction date. Who knows?

I would start looking into income based housing. I realize your house is probably a lot more cushy that an income based apartment, but that's the reality of it. This whole saving the house scenario would just be too much for me, I'd rather live in a crappy apartment in a bad side of town (been there, done that, survived to tell about it, not the end of the world, I promise) then wonder everyday when someone was going to show up at my door to kick me out.