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Considering BK - ? about Mortgage

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    Considering BK - ? about Mortgage

    Hello! I'm new here and my husband and I have been considering filing bankruptcy for little while now. We are meeting with an attorney on Monday to get some questions answers before we make a decision.

    We are not past due on any bills, but we literally live paycheck to paycheck and can barely afford enough groceries in a month. We don't have a lot of a credit card debt (maybe $700 a month total in credit cards and car loans), and we have some medical bills. Our mortgage is what is really kicking our butts. We are upside down by about $10,000 and have to be able to refinance in a year. We have a two year old son and a baby on the way (due in Oct) so we are only going to acquire more bills come that time. In the end, we just want out of our house and want to rent (renting is much cheaper and we like the idea of having the freedom to move whenever we want). Anyway.. we are considering filing Chapter 7, but because we are not behind on our mortgage, we aren't sure how this will work.

    I have heard some people were advised to stop paying their mortgage so that they get behind. But won't they see that we CAN afford to pay it, and that we're just choosing not to? And won't that hurt us instead of helping? I have heard it can take up to a year before a house goes into forclosure/you receive an eviction notice. If we are advised to stop making payments, then when to do we file for bankruptcy? Lastly, when would we go rent a new place to live in?

    Sorry if these questions seem silly. I know we need to ask these questions to the attorney on Monday, but I was curious and wanted some answers sooner

    PS We live in Colorado if this makes a difference on how things work.

    #2
    Your Question isn't silly at all.
    Before you stop paying your mortgage make sure you are going to be able to file chapter 7 with out that payment.
    Have you done the means test yet. You really need to know where you stand.
    here is a Means test Calculator

    http://www.legalconsumer.com/bankruptcy/means-test/
    Chapter 7 07/30/2008
    341 09/17/2008
    Discharge 11/21/2008

    Comment


      #3
      Originally posted by TEW View Post
      Your Question isn't silly at all.
      Before you stop paying your mortgage make sure you are going to be able to file chapter 7 with out that payment.
      Have you done the means test yet. You really need to know where you stand.
      here is a Means test Calculator

      http://www.legalconsumer.com/bankruptcy/means-test/
      We definitely won't be doing anything until we find out for sure if we can file and talk with the attorney first (ie stop paying our mortgage)!

      I read that if you make less than your areas median income then you don't need to take the means test. Is this true? Mine and my husband's combined income is less than our states median income.

      Comment


        #4
        You Still need to do the means test.
        We have had people post here that have some income but no expenses. that can be a problem.
        I think doing the test before you see a lawyer helps you understand what the lawyer is going to tell you.
        It's also best to see a couple lawyers before paying one.
        Chapter 7 07/30/2008
        341 09/17/2008
        Discharge 11/21/2008

        Comment


          #5
          We are below the median for our state and are not being required to complete the means test - that's supposed to be the "letter of the law" but some districts seem to require it anyway.

          This may seem a little blunt, but from what you say I wonder if BK is really the best choice. You don't list all your numbers (total debt, income, payments etc) but $700/mo in payments and only 10k upside down and worrying about an interest rate change 2 years down the road seems like a long way off from needing to file - and you do say that you can pay everything right now.

          Obviously we don't see the whole story from one little post, but if that were me I would be looking at getting rid of the car payment, negotiating interest rates on cc's, tightening the budget, selling stuff, looking at ways to increase income, etc. Just my take from the little info given here. Good luck to you.
          BKForum Blog: The Journey

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