Everything is hinging on Mortgage Co.

[2muchinDebt]

No problem Banana :o) Hijack away..I've done it too.

Hmmm...only you can decide that, but as much as I love my house, love the schools, location, neighbors..everything about it...if the mortgage co. doesn't modify to what we can afford then it HAS to get included in Ch 7. If they do modify us, we can file CH 13. We can go either way. So we are waiting as long as we can. I would wait and see what they offer and then decide.

If you can't afford to keep paying the mortgage and you file CH7 and don't include the house in the BK then you are going to be responsible for the mortgage. By including it in you are protecting yourself in the event you are unable to pay the mortgage.

As far as how long you can stay in the house..that depends it could be a few months or longer. No one, even your lawyer can predict that really. Someone else can chime in here and give their opinion. It is taking longer for some to foreclose and kick you out, but I wouldn't bank on 2 yrs.

If your bank doesn't modify and you file and foreclose you can save up $$$ after you file for a place to rent.

[BananaCabana]

That was what I was thinking too. Two years seems like an awfully long time to be able to stay in your home without paying anything. We do have neighbors that stopped paying their mortgage and went into foreclosure. They ended up staying in their home for one year and one month, without paying anything, before they had to move out. I don't know all of their circumstances though. For example, did it just take that long to foreclose on them? Or did the bank want them to stay in the home and keep it up until the bank could sell it to someone else? These are questions that I don't have the answer to. Of course we are going a different route by declaring Ch. 7 so we shall see.....

[EverHopeful]

UST wants 2 years of statements, 3 years of credit applications, 1 year of bank statements & canceled checks, and more from me. Prepare for the worst, hope for the best.

How long do you have to come up with all that paperwork?? In 30 days ?Is that an audit by the UST?

What if you simply cannot get the 2 yrs worth(online statements don't go that far back and you would have to request it fr the CC and god knows when they will get back to ya)??

What do u mean by credit aps?

I have also changed banks, fr WAMU to Credit Union in the last 2 yrs, Wamu online statements are long gone

Sorry for the hijack and side tangent.

[2muchinDebt]

YOu'd have to ask them to find out. Did they file too? Every mortgage company is different as is every loan is different too. That 1 yr 1 month could have been from the time they missed the first payment, it could be from the time they got a Notice of Default...our lawyer told us if we were to get a letter stating we are selling your house on the steps of the courthouse of there will be a sheriff's sale on your house with a date on it...we would need to file right away. And then I believe you may have a few months "bankruptcy stay." Not sure on that though. When you file BK you have an automatic stay.

I am no expert so you have to research and read the boards and ask the lawyer.

[OhioFiler]

Please let me hijack this thread for just a minute. From what is said above would it would be wise to let a house go in a Ch. 7 if it is underwater? The reason I ask is that we are over $70,000 upside down in our mortgage, no late payments (yet) and we are struggling to decide whether to let the house go or try to keep it. We can't afford the mortgage with our income the way it is right now so we have been waiting patiently to see if we qualify for a loan modification. The bank keeps telling us maybe by the end of June. We have several children and animals so our fear is that we would not be able to find anyone "stupid" enough to rent to us. Even if we got rid of most of the animals, or even all of them, we still have a house full of children that most renters avoid like the plague.

One other question....the lawyer we consulted with this week said that if we surrendered it we would be able to live there for two years before we would be made to move out. Is that really possible? Without making any rent/mortgage payments? Let me add that this is in South-Southwest Florida.

Sorry again for hijacking your thread 2muchinDebt. It just seemed a good place to expand on the home thing and modification.

$70,000 negative equity is a lot of net worth. If you keep the house and file BK you "start fresh" except you're already way behind because you have a mortgage on a house worth $XXX,XXX but you owe $XXX,XXX PLUS $70,000. You can dump that house and buy one just like it for $70,000 less in just a short time period (2 years FHA). You could probably buy one just like it for about $140,000 less if it's a foreclosure sitting idle. Then you have no negative equity, no negative net worth.

I would stop paying the mortgage, ride the collection efforts for awhile, file CH7 BK and stay in the house as long as possible. I don't think 2 years rent-free is unrealistic in your location.

[BananaCabana]

$70,000 negative equity is a lot of net worth. If you keep the house and file BK you "start fresh" except you're already way behind because you have a mortgage on a house worth $XXX,XXX but you owe $XXX,XXX PLUS $70,000. You can dump that house and buy one just like it for $70,000 less in just a short time period (2 years FHA). You could probably buy one just like it for about $140,000 less if it's a foreclosure sitting idle. Then you have no negative equity, no negative net worth.

I would stop paying the mortgage, ride the collection efforts for awhile, file CH7 BK and stay in the house as long as possible. I don't think 2 years rent-free is unrealistic in your location.

Thank you! You have a way of saying it that makes it crystal clear in my mind now.

I guess my next question, and I will ask the lawyer (#2) we are consulting with today about it too, is what do we do with the fact that our pool is green since our pump broke and we haven't been able to pay to fix it, the microwave died two weeks ago, the dishwasher brokedown three weeks ago, and our fridge is leaking water from the freezer to the fridge compartment that we haven't been able to fix. It is somewhat ironic that everything is starting to "die" around here. Knock on wood. If it was the A/C I wouldn't hesitate to get it fixed with heat indexes around 105-115 this past week but what about everything else? We can live without the microwave, I can wash dishes by hand, and the fridge still works but is that more irresponsible for me to leave them broken since we will be letting the house go or is it more irresponsible for me to not make balanced meals for the family because we need to replace or fix the broken appliances? I also worry about the fact that the walls need painting, the tile is cracked in places from the house settling over the years, the carpets are discusting and we had planned to replace them, like we already have in the living room, as soon as we could and there are a couple of holes in the walls where someone has opened the doors too hard and punched it with the doorknob. We are not easy on the place although I try to keep it clean. Dirt still seems to be absorbed into the walls and grout.

My heart and head says to worry about other things and let the house problems go unless it is something we can not live with. Like a septic tank overflowing or the A/C going out. What have others done?

[mike258]

If you are going to surrender the home in Chapter 7 do not sink 1 penny into it. Just like you wouldn't put new tires on your car 2 days before the repo man came for it...

[2muchinDebt]

Thank you Ohio..I wanted to say something to that nature, but I am horrible at explaining things.

I have read though that it can take 3 yrs to buy another house and wouldn't you have to have a good down payment on it now? I mean it's going to be hard to get a mortgage after all this...

Also the previous poster is right..do not sink any $$ intop the house if you are letting it go...not even a penny because you are basically throwing $$ away if you do.

[OhioFiler]

Thank you Ohio..I wanted to say something to that nature, but I am horrible at explaining things.

I have read though that it can take 3 yrs to buy another house and wouldn't you have to have a good down payment on it now? I mean it's going to be hard to get a mortgage after all this...

Also the previous poster is right..do not sink any $$ intop the house if you are letting it go...not even a penny because you are basically throwing $$ away if you do.

I believe FHA loans don't consider BK after 24 months and you are only required to put 3% or 5% down. I haven't researched those numbers lately.

I would think it would be easy for the OP to rent a place to meet his needs for a year or two after he is forced out of his residence. The rental market isn't exactly booming in most places either not to mention the stigma of BK is really becoming a non-issue as everyone knows times are tough. IF I found a place to rent that had what I needed for my kids and pets I'd do anything to satisfy the landlord I was the right choice for tenancy.

I wouldn't put a dime into a house I intended to abandon. If you need a new fridge, get one. You can leave the old one in the place when you leave.