Chapter 13 to 7 questions.

[mj2010]

I am in arrears on my mortgage roughly $18K. My 5 year ARM just reset to 2.875% which gives me the relief that Wells Fargo refused to do in a modification. I have a foreclosure coming up on 10/18/2011. My thought process is to file CHP 13 and roll in the arrears and move on the best I can and keep the house. I am not completely secure in my job / income so at least I have somwhere to stay with my family til my job / income situation plays out.

My 2 questions are;
> If I can not make the payments in CHP 13 and eventually declare CHP 7. Where will I be in the foreclosure process? Will the clock start new and I have a new timeline before I have to get out?

> If I file CHP 13 then can not make the payments and am forced to CHP 7 wil this show up as 2 BK's or just one on my credit report?

Thanks for any input.

[lrprn]

> If I can not make the payments in CHP 13 and eventually declare CHP 7. Where will I be in the foreclosure process? Will the clock start new and I have a new timeline before I have to get out?

In Ch 7, your secured asset payments have to be up to date on filing day in order to keep them. If you are still in arrears on Ch 7 filing day, your home will have to be surrendered.

> If I file CHP 13 then can not make the payments and am forced to CHP 7 wil this show up as 2 BK's or just one on my credit report?

If your 13 is dismissed and you file a new Ch 7, then both bankruptcies will show as filed on your credit report.

[Pandora]

I am in arrears on my mortgage roughly $18K. My 5 year ARM just reset to 2.875% which gives me the relief that Wells Fargo refused to do in a modification. I have a foreclosure coming up on 10/18/2011. My thought process is to file CHP 13 and roll in the arrears and move on the best I can and keep the house. I am not completely secure in my job / income so at least I have somwhere to stay with my family til my job / income situation plays out.

You also need to factor in that in a Ch. 13, you must pay both arrears AND the regular mortgage payment, along with any other claims approved.

Go over everything very carefully before you decide to file BK, be it 13 or 7 - as your comment of your job not being very secure can lead to more debt / bills that you will not be able to add into your BK later on.

[mylife]

LRPRN, is that the case, for the home, for all states? We are in the same situation as we are planning to convert and our mortgage is also in arrears. In speaking with the mortgage company, we were advised that we can try for a modification and if approved the arrears will be taken care of and if not then we're under no obligation to pay and they would work with us should we want to keep our home.

[lrprn]

LRPRN, is that the case, for the home, for all states? ... In speaking with the mortgage company, we were advised that we can try for a modification and if approved the arrears will be taken care of and if not then we're under no obligation to pay and they would work with us should we want to keep our home.

The current bk law states that when filing Ch 7, all assets must be up to date payment-wise in order to retain them after filing. There's nothing in the bankruptcy law that accommodates paying back arrears when filing Ch 7 like there is when filing a Ch 13 plan.

However, what your mortgage company is proposing is a modification that as a part of the deal pushes the arrears back into the modification contract and in essence, resets your mortgage to show no arrears. If your mortgage company will agree to such a modification (and there's no guarantee this will happen quickly, if ever), then the modification will take your current arrears out of the equation. This allows you to file Ch 7 without having to surrender your home.

In the situation you describe there's only two ways it will be possible to for you file Ch 7 and keep your home - (1) you pay the arrears in full before filing, or (2) you and your mortgage company sign a renegotiated mortgage contract that adds the arrears back into the adjusted amount owed on your home.

If you haven't done so already, do set up 3-4 free initial consultations with experienced bankruptcy lawyers in your area. Bring along a detailed listing of all your assets and what is still owed on them, all your expenses, and your normal living expenses. There's no way to know for sure which chapter you can file and what the consequences of each may be before an experienced bk lawyer completes the Means Test and (if necessary) the Schedules.

[IamOld]

lrprn hello - then may I ask a stupid question - say then the OP is behind -bank - let's assume - will work with him - they don't HAVE to forceclose...??