Can you file Chapter 7 and still pay mortgage and keep house?

[325Falcon]

The realestate market will turn around! (I hope)

[yoyoma51]

I hope so, too.

But it won't happen anytime soon. I don't see why one should gamble on it if they have to opportunity to 'walk away' now vs. [maybe] being even more 'stuck' later.


PLEASE NOTE: I am not a lawyer. Bankruptcy may or may not be a best scenario for you. It depends on your situation. You may assume my advice is totally useless. Talk to an experienced bankruptcy attorney (or three) in your jurisdiction for legal advice.

[325Falcon]

I think "owning" is better than renting even if one is upsidedown now. I guess it depends.

I think if I was upsidedown on my house I still would want to keep it, now cars are a different story.

[topfuel]

Reaffirm

In a nutshell, is that ever possible?

Thanks in advance!

Yes, it is possible and it's done everyday. Just tell your attorney you want to reaffirm the debt...it's as simple as filling out one sheet of paper just restating your intent to keep paying on your existing mortgage

[inhocknow]

What happens if you re-affirm the house, and then after 6 months decide that you don't want it anymore and then just stop making payments and let the bank foreclose on the house.

Whats the difference between that and including it in the original plan which was bankruptcy?

Thanks for all of yout help.

[lrprn]

What happens if you re-affirm the house, and then after 6 months decide that you don't want it anymore and then just stop making payments and let the bank foreclose on the house.

If you and your mortgage company sign a reaffirmation agreement and it's filed with the bk court, then if you stop making payments on your mortgage and walk away from the house any time after that, the mortgage company will foreclose and you will be legally saddled with the remainder of the loan.

Since the mortgage company likely won't get much for the house when they finally auction it, you'll probably end up owing your mortgage company a considerable sum for a house you no longer have.

Signing reaffirmation agreements should be done with your eyes wide open and ony after a deep discussion of the pros and cons with your banrkuptcy lawyer.

[CindyLou]

You could just not reaffirm and the mortgage company would likely allow you to do a "ride through" and stay there as long as you keep paying. Then, if you ever need to walk away, you can.

This sounds like the safer option to me. You get to say in the house, have all the tax benefits, kids stay in same school and you don't have to be tied down.

Now the only question I would pose that maybe someone else can comment on is whether the 2nd mortgage will allow a ride through?? I've never really thought about that one.

[lrprn]

Now the only question I would pose that maybe someone else can comment on is whether the 2nd mortgage will allow a ride through?? I've never really thought about that one.

The second mortgage is almost certain to allow a ride-through because if they didn't and foreclosed, the first mortgage holder would get first dibs at the foreclosure auction sale money. There might be nothing left for the second mortgage holder at all, especially given the current slowdown in home sales and decrease in values nationwide.

[tay666]

But would it be worth the hassle of moving (possibly to new school district if we couldn't find anything in the one we are already) and most likely renting some place would run $1,000 - $1,200 while we're already paying $1,240. To rent we would have to come up with a regular deposit and a pet deposit, more phone and utility deposits, moving van/u-haul costs, etc., etc., wouldn't get any tax break for renting. I'm just not seeing how saving maybe $200/month is worth all that. If we can get rid of all the other debt and can start paying down faster the HE debt, I guess I'm just weighing the options. I'm not trying to argue with anyone or make excuses, just trying to figure out what's best for our family.

Thanks again.

I was thinking like that when I first started to consider BK.
Since I will loose my house due to too much equity that I cannot protect in a CH7.

While it is true that the cost of renting and your housepayment are pretty close right now. What happens if/when you taxes and insurance go up? Which would cause your paymenst to rise.
What about if the hot water tank bursts?
The roof starts to leak?
As a homeowner, you have to make those repairs out of your pocket.
As a renter, those aren't your problems.
As an owner you have to keep paying to maintain your home.
Do you think the costs will be low enough to justify continues payment on something that isn't worth the amount owed for it?

Or would you be better off giving up the house.
Renting for a couple years, and buying something later. The home prices will probably be even lower in a couple years as the fall-out from this mess is just starting to settle.
You will be able to get just as nice a place at a fraction of the cost then.
And you won't have the current place hanging over your head if things take another bad turn for you.

[HAP]

I would be willing to find a place to rent and walk away especially if we could downsize and find someplace for $850-900/month (would most likely be a 2 bedroom but why pay for an extra guest room when it is never used?). My husband is the one who need convincing. I tried to bring it up briefly the other day. I told him we could possibly get rid of the $500/HE payment and go from a $1250 mortgage payment to maybe $900/month. He wouldn't have to worry about yard work (unless we found a house to rent vs. apartment, etc.) I also brought up the fact that this house is only 3 years old and because of the cookie cutter way all these houses are built (meaning fast) he's complained of all the nail pop-outs we've had, the built-in book shelfs that you can see pulling away slightly from the wall, we had to get some drywall cracks fixed from the house settling (luckily under warranty, but who knows if they'll resurface), we already have to eventually replace carpeting in the master bedroom due to a stupid paint spill accident on my behalf (don't ask) along with carpet upstairs where our lovely cats have clawed at the doors and ruined it and this is just after 3 years. He hates yard work - proven by the fact that I have to "remind" him to mow the yard/weed eat during the summer, etc., etc. I think that he thinks that if we give up our house, we'll never be able to buy a new one. We used a VA loan so no deposit, so I'm not sure what will happen with that, if we could ever use it again if we file bankruptcy. I think that if I keep researching and showing him the benefits and how much debt we could get rid of through the mortgage and home equity loan alone (as well as the almost $1,800 in payments we make now on our truck, credit card and loan payments each month, I could hopefully convince him. He's the one that always says as long as we have a roof over our head and a place to sleep (and food) he's fine with that, so I guess I have to keep working on it. Thanks again for everyone's input!

[keepmine]

With 2 years of good bill paying history post bk, you qualify for FHA financing. A few more years go by and you'll qualify for more conventional loans. Many have gotten mortgages post bk at good rates.

[sandhall]

you can use VA again 3 yrs after BK

[DontBother]

I would be willing to find a place to rent and walk away especially if we could downsize and find someplace for $850-900/month (would most likely be a 2 bedroom but why pay for an extra guest room when it is never used?). My husband is the one who need convincing. I tried to bring it up briefly the other day. I told him we could possibly get rid of the $500/HE payment and go from a $1250 mortgage payment to maybe $900/month.

The difference in the cost of living of various areas is crazy!!! I currently own a smallish 1600 sq ft house, built in 2003. My payments total $2700 per month. It's absolutely nothing fancy, just your basic run-of-the-mill tract home. I'm located about 100 miles inland of Los Angeles... I've compared rentals, and for a place comparable to ours in/near our neighborhood would be $1600-$1800. So in my area, there is a large difference between what you'd pay for a mortgage payment vs what rent would cost you...

Now for us to find some place for only $900 per month...well there's a word for that...ghetto!!!! Shoot 'em up ghetto! But it's crazy that $900 in other parts of the country will get you a nice home or apartment to live in. I wonder if the rate-of-pay in those areas is less also..??..

[tay666]

Now for us to find some place for only $900 per month...well there's a word for that...ghetto!!!! Shoot 'em up ghetto! But it's crazy that $900 in other parts of the country will get you a nice home or apartment to live in. I wonder if the rate-of-pay in those areas is less also..??..

Well, to give you some perspective.
You can rent a whole house with a decent sized yard here for about $450 a month.
But then again, the average household income around here is about $40-50,000 a year.