Newbie about to file chapter 13 (long sorry)

[jcsawyer]

Wow do I have a lot to learn about this process! Here is a bit about our situation (warning it is not pretty)

-Been in modification with BOA Home Loans now for over 3 years, they have lost docs, lied, refused to communicate and decided now that they want to foreclose on us after attempting to get this whole thing rectified (even hiring an attorney to help us who basically just sat on his rear and was paid 1500 to do nothing for us!) We are now $24199 behind in payments due to being told not to make payments (BOA's words in writing no less)

-had to purchase a vehicle as mine was broken to the point of no return (to the tune of $8k in repairs needed) I now have a 22% loan that never gets paid down no matter what I do. (am now $1k behind in payments due to pure frustration thanks to this lovely company called Santander)

-diagnosed with MS, seizures, and have had severe scoliosis since I was a child (am now attempting to get disability since I was deemed 100% disabled years ago and did not find out until last week)

- I have $3200 in medical debt

-I have $3200 in unsecured debt

It has not been an easy road but here is where I am confused, perplexed, lost even. My husband (lord love him) has signed on with his dad on a house in SC (we are in NC). He is not on the loan but just on the deed under a survivorship. His dad pays the house down like a banshee! He has $50k in equity in just 2 years of paying on this house. Now thats not all as they seem to share everything and it really annoys the mess out of me! He and his dad are on the title to a 2001 ford ranger which is paid for. We do not use it but it is on our insurance his dad solely uses this vehicle. I do not know how this will effect us in chapter 13 because he is on this lovely deed to a house we have no right to unless his dad croaks in the next 5 years (which is unlikely since hes in perfect health). I dont want to effect his dads credit because this is his "vacation" home and by filing bankruptcy we are being seen as horrible people by his father *rolling my eyes* some things just cannot be helped.

any ideas of how this may or may not effect our bankruptcy and is there any ideas anyone can give us on our journey? I need to keep my sanity but it seems to be dwindling and causing anxiety in both of us.

I appreciate any answers you guys can give us, as our attorney has not given me the best advice on this situation. He said to value its equity at our exemption level so that it does not get put in, in anyway but to me that seems fraudulent as its worth more than that.

[SMinGA2]

It sounds like your husband has no value in the house in SC unless your FIL dies. If that is so, then he has no current value in the property. (I think...) Your bankruptcy attorney (consult with several, by the way) will know for sure though may need to review how the property is titled.

The 2001 ranger sounds like 1/2 of its value is your husband's property, but I doubt that is much on an 11 year old SUV.

Other thoughts - what is your intent on your current home? Since you're in the ch. 13 forum I'm guessing you intend to keep it & the vehicle. A 13 can pay the mortgage arrears over time, and bring the vehicle down to a reasonable rate. But is the home a good value, considering what its worth compared to what is owed? (Just something to think about.)

[jcsawyer]

Thanks Staci for the input. This house is right on the upside down border. We dont have but at most 5k in equity if we did away with the 2nd mortgage. It is something we can afford and its not an outlandish house by any sort. Our payments are normally $823 we just cannot get the arrears caught up on the house which is all that we wanted to do in the first place but BOA has decided its best to mess with us for three years before doing anything. And that is what has brought us here. We do intend to fully keep our home as it is right here with all of our family. The home is valued at 113k (tax value as of this past fall) we owe $92610 on our first and $23k on our second.

I never again want to be put in this situation!

[Sammie]

Hi JC I am new also to this whole BK situation & upon joining this Forum only a week ago I have found out valuable information from everyone here. You will learn a lot from this kind "family".

We also live in NC and you should contact an Attorney ASAP. The Consultation is free. When we sat down with the Attorney, one of the first questions he asked was if we were on any loans, Deeds, etc. because by us filing would also effect the other person. I am not sure how it effects survivorship, but an Attorney will be able to put a lot of your fear to rest & be honest with everything. It will get better. sammie

I just reread your post and see that bet. the 1st & 2nd Mtge. you owe more than what the house is worth, your BK Attorney can "possibly" include your 2nd Mtge. in to be discharged.

When you go bring 2 yrs. Tax Returns 2010 & 11, 6 mos. pay stubs, proof of house and automobile Ins. & all of the amounts you owe and want to be discharged.

[SMinGA2]

You may want to figure out what you really owe on your 1st mortgage - and what your home is really worth. Tax assessment is not always a good indicator. Can you look up any recent home sales in your area? If your home is worth less (even by $1) than what you owe on the first, a 13 can be used to strip/convert the 2nd to unsecured. The fact that you have not paid in so long would have increased your balance some due to accrued interest. That could benefit you here.

I understand about evaluating the cost of your home and deciding to stay. We're similar. I was able to get a mod (very painless compared to your story, I don't know how we got so lucky?) and our mortgage including escrow is less than what it would cost to rent. Plus we're in a good school district. On the other hand - we are hoping to be able to postpone filing for another 14 months and then just file 7. Discharge the mortgage - and in the event at some time in the future we want/need to move, if we can't sell we're covered. (House has some issues - staying is worth them. FOr now. I am pretty sure though it will need major stuff repaired prior to a sell. Like the septic system may need to be replaced...)

[jcsawyer]

Ok well on another note of all the people in the world to call BOA called and said they had approved us for a trial mod as of the 12th of this month. We have not received anything and apparently neither has our modification attorney as of yesterdays ungodly email. If he did receive something and didnt tell me boy am I going to be PISSED! Now I dont know if this is possible to accept the mod and go forth with the bankruptcy due to needing to catch up other things like all my medical debt and my unsightly car loan. Is this even possible to do?

[SMinGA2]

Yes it is possible to still do ch. 13 even if you get the mortgage modified. For us, modifying the mortgage (and ignoring credit cards and such that we'd already given up on) allowed us to postpone bankruptcy. But if you still have a need for it, then pursue it.

[jcsawyer]

Would that lower the payments to the trustee? we were looking at about 1900 a month with out our other bills and that makes it hard to even get gas weekly or groceries!

[SMinGA2]

Getting the mortgage modified on your own should allow you some room, to form a realistic budget.

Some things MUST be paid off in a plan. Like arrears, a car loan (depends on situation but in your case - to catch it up & lower interest rate it would be paid in the plan), attorney fees. Sometimes other things as well and I don't know your situation. Trustee takes a cut, 5-10% depending on district. Sometimes the mortgage (ongoing payments) are paid within the plan, sometimes its outside of the plan meaning you pay it directly. A plan must provide for all of these things and fit with your DMI.

For you, you want to work with your attorney to know what must be paid in the plan. That will help you plan and budget. Assess your income, and figure out the best way to make it work.

Did the $1900/mo payment estimate include your regular ongoing mortgage payment? Some districts require that if you have arrears, you pay your mortgage in the plan also. If so, and your mortgage is caught up with a mod, you could perhaps pay it directly (outside the plan) which would save you money. The trustee takes 5-10% of all you pay in, so if he/she is not paying your mortgage, he/she doesn't get a fee for it. Either way, resolving the arrears will lower the amount that MUST be paid off in a feasible plan, so if you were looking at a very strict expense budget to make a plan work then modifying should help.

[jcsawyer]

Yes it did include the arrears to the mortgage. I am only behind 2 payments on my car but the stupid thing never gets paid down due to this lovely company its with. Thanks for the info and the insight its been a long road coming we signed the agreement for the modification and they extended the date to pay the first payment by a month so that helps a lot!!!!

[SMinGA2]

With a high APR, being behind on a car loan is the kiss of death. The interest accrues so fast that you need to catch up & then pay extra to get it back to 'normal', where normal is high accrual but at least has you making progress. The ch. 13 should take care of that - you would pay off the balance during the plan at a more reasonable rate.

For what its worth - I have Santander also. When I had to finance a car last April (or not go to work) they were my only option. The only bright side was that the worst of our financial mess was behind us (knock on wood) so I've gotten ahead and that helps as I cut the interest faster than scheduled. Even so, I still pay more than $8 per day in interest. Will have a big chunk of the loan paid off by early September and I'll have it down to a little over $5 a day.

Congrats on your mod! I'm guessing they will bring it current and adjust the rate to something good? One thing to look out for: they may need to make adjustments to your escrow account, if you have one. You might want to do the math and figure out where you stand on that, and prompt them to address it, unless you've been handling taxes & insurance on your own.