What Happens To Part of Mortgage Not Covered By Surrendering Home?

[charmd]

Hi- can someone please point me in the right direction:

Our BK is going good except for my balance on the HELOC that we could not strip.
Our first has been modified to a great interest rate but the homes in my area keep decreasing in value. A few homes similar to our square footage have sold for $150,000 less than we owe with our second.

My question is if we decide to surrender the home at some point and the house sells for $150,000 less than we owe on first and second is that added to our unsecured debt?
The $150,000 would put us over the limit for unsecured debt to include in a 13.

I have seen some posts from HHM and other moderators on this and info on surrendering your home. Can someone let me know how I can find these posts or threads?

Citi has asked us to make them an offer to settle the loan, but it seems like we might be throwing good money at a bad debt- I just want to know if there are any options.

Thanks

[justbroke]

You're in a confirmed Chapter 13 plan. I haven't read any cases where a debtor surrendered a home after confirmation and had their case dismissed due to the debt limits (as per 11 USC 109(e)). You're in the 9th Circuit (California) which has already ruled that a case which is confirmed but later is over the 109(e) limits doesn't make the case void.

There are some number of debtors that surrender their home after confirmation in a Chapter 13. I haven't read of any one of those being dismissed for exceeding the limits.

It also leads me to question why Citi is asking you to settle a loan included in an active and confirmed Chapter 13?

[despritfreya]

Surrendering the home post filing does not change your unsecured numbers for 109 purposes. What would have thrown you over was the strip off if you had no equity to support any part of the 2nd.

Des.

[charmd]

Thanks for the responses- I feel better knowing that we have this option.
I got letters from my attorney in the summer of 2011 to let GMAC and Citi speak with me about trying to modify both my first and second mortgage.

GMAC modified my interest rate which dropped my payment and added the ARREARS to the loan- a percent of the ARREARS that were in the BK are now being paid to the unsecured creditors.
CITI said they would not modify my loan but offered to negotiate a lower payoff, but I would have to send it all at once- We owe them close to $200,000 and I don't have a huge chuck of extra money sitting somewhere so don't see how this is an option. I was going to just keep paying on the CITI loan, but have read a lot of post how people are trying to keep their homes and throwing good money at a bad investment.
It is hard to come to terms with- especially since we worked for so long on the loan mod, but I am beginning to think I am in that situation.