Needing Advice-ASAP

[sherrenee]

Ok, here is the deal.

My husband and I filed chapter 7 we go to court 9/21. Here is our isssue....we have a first and second mortgage. Our first mortgage is fine we owe about 104, 800 with a low interest rate. Our second mortgage is through a local bank and it renews October 2011 (yes I know two years away) however I am extremely concerned that we might be upside down a bit. When we originally got the loan our house appraised at 180k however I suspect it is now closer to 160k. We are current on both mortgages.

I am unsure what to do... should we change to chapter 13? Would that even help this situation? Should we reaffirm and hope for the best? Should we go ahead with chapter 7 and if we can't sell file chapter 13 later to force a payment plan in order to buy time? Will it be possible to find financing in two years with the market and with the bankruptcy on our credit? Our bank is now saying that they don't do loan modification.

I really need some help and soon. I dont want to make the mistake of doing chapter 7 only to later on loose our house.

[justbroke]

I am unsure what to do... should we change to chapter 13? Would that even help this situation? Should we reaffirm and hope for the best?

I would only advise a switch to Chapter 13 if you would be able to strip the 2nd lien. It appears that you have sufficient equity to cover the first lien and a significant portion of the 2nd lien!

Now, that also means that you may be pressured into reaffirming both loans! (Whether the so-called "ride-thru" option is available to you depends on what State you live in and if you're current on both loans.) Your key issue is that your 2nd lien is partially if not significantly secured. I don't know the value of your 2nd lien/mortgage, so I don't know how much it is secured, but it's at about $55K according to your numbers.

So the real question is, what are you trying to do? Why are you filing bankruptcy?

[2manybills]

We were a little upside on our 2nd, but did a ride thru instead. But everything depends on your location and your particular situation.

We are not reaffirming either of our mortgages but we are keeping our house.

[sherrenee]

I would only advise a switch to Chapter 13 if you would be able to strip the 2nd lien. It appears that you have sufficient equity to cover the first lien and a significant portion of the 2nd lien!

Now, that also means that you may be pressured into reaffirming both loans! (Whether the so-called "ride-thru" option is available to you depends on what State you live in and if you're current on both loans.) Your key issue is that your 2nd lien is partially if not significantly secured. I don't know the value of your 2nd lien/mortgage, so I don't know how much it is secured, but it's at about $55K according to your numbers.

So the real question is, what are you trying to do? Why are you filing bankruptcy?

Our goal is to keep our house. We are filing bankruptcy due to having credit card debt and job loss.
Yes, the numbers are correct our first mortgage is secured, our second mortgage looks to have about 15k that is unsecured due to loss of value.

Im not sure what you are meaning by "ride thru". We live in Arkansas are we required to reaffirm or can we just continue to pay w/o reaffirmation?

[justbroke]

Im not sure what you are meaning by "ride thru". We live in Arkansas are we required to reaffirm or can we just continue to pay w/o reaffirmation?

Ride-thru is exactly as you say that you'd like to do. That is, you dont' reaffirm and you don't surrender. As you write, you just continue to pay your mortgage on-time.

I actually don't know if the "ride-thru" option is available in Arkansas.