Hi everyone! I used to frequent these forums a couple years ago, nearly drove myself mad when BK suddenly loomed like some hideous nightmare in another person's dreams.
Next meeting with attorney is Wednesday, but wanted to ask opinions here to gain different perspectives prior to that.
Two years gone by, we haven't paid any debts for about 2 and a half years. One judgement, from my wife's smallest creditor, about 800 bucks, believe it or not. Not a peep from any other creditors. At the time we owed about 120k in unsecured and have a mortgage (just quit paying) of 380k. House has no equity, technically not upside down, but after sales fees it would be. And that would be IF it sold.
Our income is over the median, in Florida, but we could qualify for a 7, I believe, based on a couple things. Our mortgage is nearly 4k per month, on an income of about 7-8k per month. With utilities and other expenses, this house is eating about 70% of our gross income. I also am a walking medical disaster, and cost about 2k per month to get by right now. More surgery on the way.
In the last 2 months of not paying the mortgage, we have saved about $8k.
We have about $32k in quickly accessible and currently exempt money.
Each month that passes will add approximately $4k to our funds.
Houses here can be had for 27-50k on the lower end. They are livable in most cases, if they need some repairs.
Would like Devil's Advocate opinions on these scenarios:
1. Try to get a workout of some sort with Countrywide and file Ch 7. NACA may be able to get us to 3% 40 years (unlikely, but not impossible), which would lower expenses a lot, but we dont have any real interest in keeping the place. Following the Ch 7 discharge we would walk away. This would allow us to utilize the mortgage expense as a "looking forward" expense and help us qualify for a 7, but is probably not required.
2. Walk away as soon as CW forecloses, saving money until that time. We are already able to purchase a home outright, and each passing month makes it easier (and the home nicer). Since our huge mortgage and utility bills were devouring our income until now, our budget is very likely to settle down and we would STILL qualify for a CH 7 anyway, though we would probably need to wait a while. I've run the expenses and we have sacrificed to the bone, to our detriment, in terms of medical and dental care, and myriad other things that any "normal" household might enjoy.
All in the hope of saving this pile of bricks that has consumed nearly 500k in ONLY interest in the last 10 years.
The SOL for suits in Florida is 4 years, and we are 1.5 years from that. I know it is likely someone else may sue us prior to that, but our largest debtor is itself in serious danger of collape (Advanta, may they Rest In Pieces, Forever and EVER
)
In the event that someone DOES sue again, we can file then.
The benefits of scenario 1 seem to be we get to use the huge expenses of the mortgage in the means test. However, we are accumulating monthly income that may be viewed suspiciously. Florida allows up to 12k in wages in the bank though.
However, the trustee may judge that we can pay back and put us in a 13 if we are unable to work something out with CW.
Scenario 2 would get us into a home we can afford. In fact, we would have no payment at all. We would wait to file and perhaps not file at all. I believe that my very high medical expenses (around 2k per month) would offset any increase in income along with actually taking care of ourselves in terms of other medical and dental care.
It would also be funded by things that are exempt anyway, for the most part. We are also comfortable with this sort of Russian Roulette. After 2 years of no payments, we're not overly afraid that creditors are interested in us.
Thanks for reading this long post, if you indeed have, and many thanks for your replies. This forum kept me sane a couple years ago when I badly needed it, and I will always appreciate it.
I will be more active around here as we proceed, and will report back if anyone is interested.
Best wishes,
DMC
Next meeting with attorney is Wednesday, but wanted to ask opinions here to gain different perspectives prior to that.
Two years gone by, we haven't paid any debts for about 2 and a half years. One judgement, from my wife's smallest creditor, about 800 bucks, believe it or not. Not a peep from any other creditors. At the time we owed about 120k in unsecured and have a mortgage (just quit paying) of 380k. House has no equity, technically not upside down, but after sales fees it would be. And that would be IF it sold.
Our income is over the median, in Florida, but we could qualify for a 7, I believe, based on a couple things. Our mortgage is nearly 4k per month, on an income of about 7-8k per month. With utilities and other expenses, this house is eating about 70% of our gross income. I also am a walking medical disaster, and cost about 2k per month to get by right now. More surgery on the way.
In the last 2 months of not paying the mortgage, we have saved about $8k.
We have about $32k in quickly accessible and currently exempt money.
Each month that passes will add approximately $4k to our funds.
Houses here can be had for 27-50k on the lower end. They are livable in most cases, if they need some repairs.
Would like Devil's Advocate opinions on these scenarios:
1. Try to get a workout of some sort with Countrywide and file Ch 7. NACA may be able to get us to 3% 40 years (unlikely, but not impossible), which would lower expenses a lot, but we dont have any real interest in keeping the place. Following the Ch 7 discharge we would walk away. This would allow us to utilize the mortgage expense as a "looking forward" expense and help us qualify for a 7, but is probably not required.
2. Walk away as soon as CW forecloses, saving money until that time. We are already able to purchase a home outright, and each passing month makes it easier (and the home nicer). Since our huge mortgage and utility bills were devouring our income until now, our budget is very likely to settle down and we would STILL qualify for a CH 7 anyway, though we would probably need to wait a while. I've run the expenses and we have sacrificed to the bone, to our detriment, in terms of medical and dental care, and myriad other things that any "normal" household might enjoy.
All in the hope of saving this pile of bricks that has consumed nearly 500k in ONLY interest in the last 10 years.
The SOL for suits in Florida is 4 years, and we are 1.5 years from that. I know it is likely someone else may sue us prior to that, but our largest debtor is itself in serious danger of collape (Advanta, may they Rest In Pieces, Forever and EVER
)In the event that someone DOES sue again, we can file then.
The benefits of scenario 1 seem to be we get to use the huge expenses of the mortgage in the means test. However, we are accumulating monthly income that may be viewed suspiciously. Florida allows up to 12k in wages in the bank though.
However, the trustee may judge that we can pay back and put us in a 13 if we are unable to work something out with CW.
Scenario 2 would get us into a home we can afford. In fact, we would have no payment at all. We would wait to file and perhaps not file at all. I believe that my very high medical expenses (around 2k per month) would offset any increase in income along with actually taking care of ourselves in terms of other medical and dental care.
It would also be funded by things that are exempt anyway, for the most part. We are also comfortable with this sort of Russian Roulette. After 2 years of no payments, we're not overly afraid that creditors are interested in us.
Thanks for reading this long post, if you indeed have, and many thanks for your replies. This forum kept me sane a couple years ago when I badly needed it, and I will always appreciate it.
I will be more active around here as we proceed, and will report back if anyone is interested.
Best wishes,
DMC
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