Please help me advise my son

[indigoblue]

He's hanging precariously by a thread. His home mortgage is eating him alive and he just took a $1.50 paycut yesterday on top of a previous $2.00 one earlier in the year. His mortgage was done 2 years ago when all was right in the oilfield world. I may be biased since we just filed, but I've told him that may be the only way to relieve himself of his house. If he cannot file a chapter 7 for some reason, can he eliminate his home in a 13? His mortgage payment is extremely high for his location and there weren't enough homes to go around when he purchased. His wife doesn't work and takes care of their son. He's really depressed and I told him that a fresh start may be in order.

[MSbklawyer]

He's hanging precariously by a thread. His home mortgage is eating him alive and he just took a $1.50 paycut yesterday on top of a previous $2.00 one earlier in the year. His mortgage was done 2 years ago when all was right in the oilfield world. I may be biased since we just filed, but I've told him that may be the only way to relieve himself of his house. If he cannot file a chapter 7 for some reason, can he eliminate his home in a 13? His mortgage payment is extremely high for his location and there weren't enough homes to go around when he purchased. His wife doesn't work and takes care of their son. He's really depressed and I told him that a fresh start may be in order.

Yes. You can surrender property (including a house) in a 13 as well as you can in a 7.

But before I let the house go in any kind of bk, I would try to renegotiate with the bank. They are extremely reluctant to reduce the principal on a note and refinance. But at the same time, the last thing in the world they want right now is another foreclosed house to try to sell. So if you can offer them a better deal than they are going to get in a foreclosure, and twist their arm and hold your breath &c., deals can be had.

I've been seeing a lot of oil field people in my practice. What state is he in?

[indigoblue]

We are all in New Mexico.

[hereforinfo]

I was going to suggest a loan modification for the home. Is that the only debt he needs to get rid of? Advise him to call the lender and ask about a hardship modification. He may be able to get his interest rate reduced and loan term extended to make his payments lower and affordable.

[indigoblue]

He's been in contact with them and so far they've been pretty unwilling to help. He's down 4 months now.

[MSbklawyer]

I have found that a letter from a bankruptcy attorney to the bank president along the lines of :

Dear Mr. Banker: You aren't willing to work with us, so we have no choice but to abandon the house and file bankruptcy. So where do we turn in the keys? We will vacate the house in 60 days. If there is any change in your position on some sort of workout to allow us to keep our home, then please do not hesitate to call.

works wonders.

If you are in a really depressed real estate market, you'd be surprised how flexible they become.

What can we do to help you?

We here at Big International Conglomerate Usury Bank are your friends. We understand that sometimes bad things do happen to good people. We have a stake in this community and we would like to . . . . . .blah blah blah.

It doesn't ALWAYS work, I couldn't even say it works most of the time. But it works often enough to make it worth trying.

[indigoblue]

I don't know if any lawyer would do that without being paid up front. Our nearest BK atty is 100 miles away.

[OhioFiler]

Any chance the spouse could find a job to help?

[indigoblue]

Unfortunately, she never graduated high school and can only get a job that would not pay as much as daycare would cost.