Ch7 Notice for Relief from Stay and Abandonment BEFORE 341

[ohio]

My 341 meeting for my Ch7 bankruptcy is on Sep 21, 2009. I am including my house as I am unemployed and no longer able to make payments. I was already 2 months behind when I filed.

Today I received a packet from my mortgage company's attorney for a "Motion for Relief from Stay and Abandonment" and they have a court date set for Sep 9, 2009. Which is 12 days BEFORE my 341!

I am scared and confused. Does this mean they are trying to get the mortgage NOT included in my bankruptcy?
Do I have to attend this hearing on the 9th? And as far as abandonment, I haven't abandoned the property. Not yet, anyway. Was planning on moving out shortly after my 341.

What does all this mean in layman's terms? Any help in deciphering this, please.

[brokeballer]

They want to begin foreclosure procedures. That is all. They can't start the foreclosure unless the Stay is lifted for them.

What bank holds your mortgage? With many banks moving so slowly on foreclosure you can probably stay in your house for several months longer than you are expecting.

[ohio]

Thank you Brokeballer for such a quick response to my post!

Chase Bank holds the 1st Mortgage and CitiFinancial holds the 2nd mortgage. I included both in the bankruptcy.

So, I need to go to the hearing on the 9th for this? Then to my 341 on the
21st.

I actually hope that the foreclosure proceedings go FAST. I will be moving to MA at end of September early October, and I won't be able to keep an eye on the property like I would like to. So, getting the deed out of my name ASAP sounds good to me!


I guess I am a bit concerned about the "Abandonment" part of the notice. Just sounds like they are trying to get the house to be NOT part of my bankruptcy. Can they do that?

[NewLifeAhead]

As Brokeballer said, they just want to get the foreclosure process going. Depending on your state and bank, this process can be 3, 6 or 9 months and even longer. You can see some of the threads here that some have been in this process for 1 year or 2 years.

Your mortgage will be included in your BK as far as your responsibility to pay it is concerned.

I am going through this as well; my 341 was on the 12th and the order to lift the stay was just granted on Monday the 17th. The fun will start soon - my 90 days late will be 09/01.

Your bank seems to be aggressive as mine is (Wells Fargo perhaps?) but it still depends on your state how fast things go.

It is scary and confusing but just read up on the foreclosure procedures and you'll understand when things will happen in order to prepare for them.

Don't be in too a hurry to leave so you can some money until the time you really have to move out (IMO).

****

Sorry, sent this after you posted the 2nd time.

No you don't have to go to the hearing on the 9th.

[ohio]

NewLifeAhead, Thank you for your response. My bank is with Chase and I live in Ohio. Unemployment is barely enough for my cell, cable, car and car insurance, food, car gas, utilities.

Planning on getting married in October, and my fiance' and his job is in MA, thus the reason for the move. Not really saving much money staying here. I was already over my head with the mortgage and needed overtime to make sure all my bills were always paid. So, unfortunately, it is too expensive for me to stay.

This is a second marriage for both and haven't set an exact date as we just wanted all this to be done first. We were just aiming for October. Just he and I and the JOP on the beach where we met 24 years ago now. So happy to have found each other again and ready to get this show on the road!

He tried and tried to get a job here in Ohio, but being a factory state and with more and more jobs being lost every day here, it's just not a good place to be. He's an engineer and just got this job in MA a few months ago. Just as his severance was running out from his previous job. So, he got lucky.

Thank you for your responses, it makes me feel less stressed that this is normal proceedings. Whew!

[NewLifeAhead]

Congratulations to you guys for your engagement and finding each other again after so many years. Also, congratz on the 'soon to be' hubby's new job.

Best of luck to the both of you.

[ohio]

NewLifeAhead,

Awww, thank you so much for the congrats and well wishes. We are very excited, just trying not to let this bankruptcy stress me out so much. Thank you for your responses.

I have another question I will post on a new thread.

[OhioFiler]

If you are planning to leave the house vacant and leave the state talk with your lender about a cash for keys option. Basically, you are signing over the deed to them for a sum of money doing a CFK. This avoids them having to go through the foreclosure process.

[ohio]

OhioFiler,

Cash for Keys? Thanks for the heads up! I have heard the term before, but didn't really know what that meant. Does that mean that if they agree to this, that I would no longer be responsible for the insurance on the house?

I am not sure if my insurance is still valid or not. It's included in my mortgage payment along with property taxes, but I haven't paid my mortgage since June or maybe it was May? Anyway, my mortgage company sent me a letter last month telling me that I was $200 short on my escrow and needed to pay or it would be divied out amongst my payments making my payment $20 more a month or so. My insurance sent a paper around the same time telling me my renewal policy and that it was in effect through August 2010.

Since I haven't paid my mortgage though, what does all of this mean? Do I still have insurance on the house or not? I was afraid to call my insurance company and ask them if it is current because I didn't want to alert them to anything if they didn't know. I didn't want to contact my mortgage company for same reason.

So, should I call my insurance company? I have heard others say they were dropped once they found out they were filing bankruptcy. This is all so much more involved than just "walking away". They make it sound like it's so easy to just walk away, when really there is sooooo much more to it. Being responsible for property and house til deed is out of your name is HUGE!

Thank you for any advice!

[OhioFiler]

OhioFiler,

Cash for Keys? Thanks for the heads up! I have heard the term before, but didn't really know what that meant. Does that mean that if they agree to this, that I would no longer be responsible for the insurance on the house?

I am not sure if my insurance is still valid or not. It's included in my mortgage payment along with property taxes, but I haven't paid my mortgage since June or maybe it was May? Anyway, my mortgage company sent me a letter last month telling me that I was $200 short on my escrow and needed to pay or it would be divied out amongst my payments making my payment $20 more a month or so. My insurance sent a paper around the same time telling me my renewal policy and that it was in effect through August 2010.

Since I haven't paid my mortgage though, what does all of this mean? Do I still have insurance on the house or not? I was afraid to call my insurance company and ask them if it is current because I didn't want to alert them to anything if they didn't know. I didn't want to contact my mortgage company for same reason.

So, should I call my insurance company? I have heard others say they were dropped once they found out they were filing bankruptcy. This is all so much more involved than just "walking away". They make it sound like it's so easy to just walk away, when really there is sooooo much more to it. Being responsible for property and house til deed is out of your name is HUGE!

Thank you for any advice!

Your insurance is prepaid. Don't worry about it. You want to maintain insurance on the property even if you abandon it for your own protection.

If you can get a CFK you will cancel your insurance once the deed is transferred.

[AngelinaCatHub]

Also, Ohio's advice is excellent but don't be intimidated about the abandonment. The house is part of the estate owned by the Trustee when you filed and had one assigned. He must legally abandon the asset. It is only a paperwork thing. I was going to suggest you contact them to give them a Deed in lieu, but if you can get cash, that's great. 'Hub

P.S. Grats on your new start, new life, new hubby.

[ohio]

AngelinaCatHub, OhioFiler,

Ok, I did some searching about cash for keys and it looks like the house has to be in very good condition. This house is not in that kind of condition for sure. When I moved in in 2005, the lady that owned it hadn't done one thing to the house. It had the ORIGINAL 1955 wallpaper in it, original cabinets, nasty vinyl floor, etc. I need to have the walls sanded and repainted in one bedroom. Paint is chipping big time! All in all, the house needs minimum of $20,000 to bring it up to date, inside and out. Plus basement is not a dry basement, and needs some help.

I don't think I could get a Deed In Lieu because I never had the house on the market. My street has had the SAME 4 houses for sale ever since I moved here 4 years ago. Not one has ever sold. Not one. So, I know it won't sell. I owe $65k on it and it's value as far as the auditor for the city goes, is $62k. It was valued at $82k just 3 years ago when I got my 2nd mortgage. So, I am upside down. Not much, but I am.

OhioFiler, You said my insurance is prepaid? I thought it was included in each mortgage payment. I know it's around $500 for the year, but I thought it was all spread out into each mortgage payment. Having not paid in a few months, I was afraid that meant I didn't have my homeowner's insurance anymore.

I guess as far as the cash for keys goes, it couldn't hurt to ask, huh? Should that be done before my 341 or after?

[ohio]

AngelinaCatHub,
Thanks for the Congrats!

[OhioFiler]

AngelinaCatHub, OhioFiler,

Ok, I did some searching about cash for keys and it looks like the house has to be in very good condition. This house is not in that kind of condition for sure. When I moved in in 2005, the lady that owned it hadn't done one thing to the house. It had the ORIGINAL 1955 wallpaper in it, original cabinets, nasty vinyl floor, etc. I need to have the walls sanded and repainted in one bedroom. Paint is chipping big time! All in all, the house needs minimum of $20,000 to bring it up to date, inside and out. Plus basement is not a dry basement, and needs some help.

I don't think I could get a Deed In Lieu because I never had the house on the market. My street has had the SAME 4 houses for sale ever since I moved here 4 years ago. Not one has ever sold. Not one. So, I know it won't sell. I owe $65k on it and it's value as far as the auditor for the city goes, is $62k. It was valued at $82k just 3 years ago when I got my 2nd mortgage. So, I am upside down. Not much, but I am.

OhioFiler, You said my insurance is prepaid? I thought it was included in each mortgage payment. I know it's around $500 for the year, but I thought it was all spread out into each mortgage payment. Having not paid in a few months, I was afraid that meant I didn't have my homeowner's insurance anymore.

I guess as far as the cash for keys goes, it couldn't hurt to ask, huh? Should that be done before my 341 or after?

Your mortgage company pays your annual premium at one time for you and collects 1/12 of it from you each month. This is why you got the letter stating you had a shortage in your escrow balance and they want to increase your monthly payment by $20. They paid your insurance and/or property taxes and see you aren't contributing enough each month to cover an entire year of those expenses. The reason for escrow is so the mortgage holder knows for sure the home is insured and the taxes are paid.

[jadams]

Usually the restrictions for Cash for Keys are different than the types of things you mention.

By "good condition" they usually mean the fixed appliances haven't been removed, the copper wiring wasn't ripped out, you didn't go around taking out every single switch plate and fixture, you didn't get angry and start knocking holes in the walls, etc.

They don't necessarily mean "up to date" and great for resale.