Walking away from house and converting 13 to 7

[rjl0206]

To all,

In a middle of a BK 13 (29 months) now and want to walk away from house ($60K under) and relocate to Florida.
Spoke with BK attorney and gave me three options,
1 Convert to 7 IF possible.
2 Voluntary Dismissal then REFILE ch7 IN Florida
3 Modify/amend BK13 to surrender home

He just asked for 4 recent paystubs from both my wife and I and last years Tax Return and did not want bank statments nor another mean test (for now?).
My questions are:

1.) Can we stop Paying mortgage now or soon regardless of what my attorney wants to do in order to save up some cash for the move and possibly pay to convert our
2.) How long does our Mortgage servicer have until they can evict us if we default during a 13? (New Jersey).
3.) Will we have to do another full on means test now regardless if we try and Convert or Ammend/Modify BK13?
4.) IF we do end up ammending/modifying BK13 we will NOT be paying mortgage for a few months so as to move and secure rental in Florida, will the trustee take that unpaid mortgage money?
5.) IF we ammend and have to redo our means test will it be based on the new LOWER income / bills we will have in Florida?.

Thanks all, again this is for the state of NJ, Im under the impression that our Lender will try and forclose the house faster while we are in a 13 because we dont have many options.

[rjl0206]

bump

[SMinGA2]

I don't know about another 'full means test' but your current income & expenses will be considered. If you are 100% sure you are giving up the house, one way or another, stop paying. Its money wasted. As to how cash on hand will be considered, it would depend. I am not sure it would matter in a 13, since cash you have earned/saved recently was not an asset at the time you filed originally. If you dismiss and later file a new ch. 7, it will be an asset and you'll need to plan according to what exemptions are available to you.

For the foreclosure process - it depends on your state. Some are quicker than others. Such as in GA it can happen in as little as a few months while some states are much, much longer. You can research the foreclosure process for your state.

I'd think it would be easier/simpler if you can convert. The paperwork/information gathering may be similar - but conversion means your original file date stands. Filing a new case means another public record on your credit reports. Maybe not the most important determining factor, but something to consider. Also if you wait until after you move, you'll need to find a good attorney who is competent in filing in one state but using another state's exemptions. (You can file in FL once you've lived there 91 days, but would still use NJ's exemptions unless you have lived there for 2 years.)

[rjl0206]

Thank you stacy

[rjl0206]

bump

[keepsmiling]

Just FYI, in NJ foreclosures are pretty backed up.

[rjl0206]

thanks, so you think 6-9 months mortgage free would be reasonable? only thing is I dont think I would be able to use mortgage as part of new means test.

[AngelinaCat]

Look for threads/posts by tobee43.

She and her husband moved from NJ to Florida several years ago, and they filed in Florida. From what I have read, their house in NJ STILL hasn't been foreclosed on, and that was more than four years ago.

She also has a blog, and a Florida Group here.

[catleg]

One of the BK judges in NJ ruled on a chapter 13->7 conversion several years ago that there is no means test requirement.
Of course they can always hang you up on the stuff like good faith, your attorney hopefully knows the way through the minefield.
Foreclosures are indeed very screwed up here, I don't think any are being processed, there is a house 2 doors down from me that is in the pipeline and has defaulted on the case but the case hasn't moved forward at all this year. The house has been abandoned for 2-3 years and the loan is with Weichert mortage (probably Fannie/Freddie).

P.S. It will probably work in your favor to finish out your plan with the NJ trustee rather than having to file in FL. Those FL trustees are tough.

[justbroke]

Florida Trustees in a Chapter 13 setting are teddy bears (not tough at all). The Chapter 7 Trustees are considered tough because prior to around January of 2011, they relied on the homestead exemption NOT being available to those debtors who claimed or COULD BENEFIT FROM the homestead exemption... even in cases where they had no equity. Since the Florida ruling on the homestead exemption, any debtor not claiming the homestead exemption now has another $4,000 to add to the paltry $1,000 wildcard exemption (meant to cover ALL personal property except your car).

Given that you'd be moving, and the challenges with venue (the 91 day requirement), and which exemption scheme to use (Florida versus NJ), it may be better to get everything over and done with in New Jersey just from a logistics point of view.