Possible forecloure after filing chapter 13

[BOBBY1269]

Hello,

I need some advice:

I am presently going through a loan modification with Wells Fargo , I have an arrearage of $ 16160.00.

I would like to file a Chapter 13 to strip wholly unsecured 2nd mortgage and 8500.00 in CC debt.

WF said that they would not file a claim if I file chapter 13 for relief of my unsecured debt.

My question is , what happens if my loan mod does not go through after I file Chapter 13 for a lien strip and WF starts foreclosure proceedings , would I be to amend my chapter 13 to include the arrearages to WF ?

I am assuming I have to list my arrearages with WF on my petition , does the bankruptcy code require them to file a claim ?

Advice is appreciated.

[momofthree]

Is there a reason that you'd have to file soon? Your best bet is to wait until the loan mod goes thru (or not), and then file. I don't think you can file a 13 with arrears and not include them in the plan. If they refuse to file a claim, your attorney can file one for them.

[BOBBY1269]

I can wait till the mod gets a permanent approval , I have to go thru a 3 month forbearance plan - 1st payment 3/1/12 , then the permanent mod goes into effect - WF has stated I will get a permanent mod - but will not put it in writing , payment will actually go down about 50.00 a month

The only road block would be if my underwater 2nd mortgage with a credit union decides that want to try and foreclose , I cannot see them doing this as they have absolutely nothing to gain - but they have called and threatened - so you never can tell - they could be bluffing - if they stay quiet i may be able to get the mod done.

Don't they ( credit union ) usually charge off the loan if it is underwater - I figured they would sit on it in the hope that the housing market would come back.

[HHM]

First, you should PLAN on your loan mod being rejected.

momofthree is correct, you should wait until you have some word on the loan mod, good or bad. If bad, then you need to decide if you want to keep the house. In the 13, you will need to pay the arrears to guarantee keeping the house.

[ValleYum]

If you do file a 13 - the monthly payment for your arrears alone is going to be $267. Can you handle that and your mortgage payment??

[BOBBY1269]

yes , the projected dmi is 475.00

[HHM]

yes , the projected dmi is 475.00

Sort of begs the question, what happened that you fell behind in the first place?

[BOBBY1269]

we missed 7 payments over a 2 year period do to house repairs and vehicle issues , wells fargo never pressured us as we never got 3 month behind , but where accueing late fees every month , I decieded that it was time to straighten out the issue and get current and stop late fees , along with addressing the underwater 2 mortgage , so I stopped paying the 2nd mortgage and used that money plus money from the 1st mortgage to get ready to secure a lawyer for bk

is 475 dmi alot ? I see people on this board with dmi in thousands .

[BOBBY1269]

HHM

I believe you are the one that asked about the subordinate issue I had with WF , I just thought I would let you know that they called back and said they do not have to subordinate to the Credit Union

[catleg]

I don't see the benefit of doing the mod.
The mod essentially benefits your creditors by giving them more DMI and not paying off the arrears.
The ch13 is like a savings plan where you're paying yourself for the arrears.
I would skip the mod and go directly to ch13.
Caveat: Can't recall from your other posts whether you are ch7 eligible.

P.S. I guess one question I would have is, under the mod, what is your breakdown between principal and interest of the mortgage payment?
On the face of it I'm comparing $50 a month vs $16000 arrears.
But there will be a different P&I split after mod.
And maybe a slightly lower tax deduction if you really get into details.

[ValleYum]

If you do file a 13 - the monthly payment for your arrears alone is going to be $267. Can you handle that and your mortgage payment??

Wanted to add that this was based on a 5 year plan - ~16k/60 = ~$267

If you were on a 3 year plan, it would be ~$444