Past due mortgage and Chapter 7

[drowning_n_debt]

I can't seem to find a straight answer to this so here goes...

We are currently behind 3 months on our mortgage and in a repayment plan. We want to (and qualify for) Chapter 7, but because we are behind on the mortgage, we can't do a Chapter 7. I spoke with the bankruptcy department with the mortgage lender and they said it could be done. They said they would file a motion to have the stay lifted and then would work with me for a new repayment plan. It sounded a little fishy to me but I got the same story from 3 different reps there. They said as long as our goal was to keep the house, they would work with us to allow that. Should I believe them? Once the stay is lifted, they could just foreclose, right? It is going to take us at least 3 months to catch the mortgage up and I am unsure what to do. If we do a Chapter 13, it will take all of our disposable income to catch up the past due mortgage and past due property taxes. It would be a 36 month plan (we are below the median household income.) What would you do? Do the Chapter 7 and hope they will work with us on reaffirming the debt including past due amounts, wait until the mortgage is current and then file or go for the Chapter 13?

Thanks.

[HHM]

How long will the existing repayment plan take?

[FreshLikeADaisy]

Be aware that you can't file a Chapter 13 right after a 7 like you used to be able to; that went away when the laws changed. Good luck!

[kiddles]

If you can catch up on the mortgage in 3 months, can you do that and not file the BK until then?

[drowning_n_debt]

If we stop paying the medical bills, credit card bills, student loans, etc and focus just on the essentials and the mortgage, we can get caught up in 3 months. In essence, we would be paying two house payments a month. I just don't want to get hit with any judgements, etc. before the 3 months is up and we can file.

[drowning_n_debt]

The existing repayment plan stretches the payments out for 6 months, but we are slowly falling behind on all our unsecured stuff.

[kiddles]

Most attorneys will advise not paying unsecured, dischargeable debt once you know you will be filing BK - save the money, because at that point, making the payments is pretty much throwing away money.

Take 3 months, get caught up on the mortgage, then file BK. Unless you are already a few months behind, it's VERY unlikely anyone would get a judgement against you in 3 months.

[HHM]

This is an easy choice...

If you are qualify for a seven and know you are going to file BK, stop paying your unsecured cards now. (assuming there are not recent, large charges or cash advances from these cards).

Continue on the payment plan to get the mortgage caught-up, once the mortgage is caught-up, then file BK.

[drowning_n_debt]

Thanks for the advice everyone.