Loan Modification before filing

[rooster0330]

I just have a couple of questions, my mortgage company has offered to work on a loan modification for us. My question is would this mess anything up when we do file (hopefully) Chap 7, or should we wait until after we file. Also, they apparently pull a credit report, in order to do the modification, so they will know we stopped paying the cc's, do I list those amounts that we would be paying on the cc's on the modification paperwork or do I just leave them off... I am not sure I would want to let the mortgage company know that we are planning to file! Or am I wrong about that. Also, I haven't looked but I am sure our credit scores have plummeted..do they take that into consideration. Thanks!!!

[mickeyme]

I also just requested a loan modification. I wish I would have done it prior to filing as now that it is after my discharge I am not sure that they will be able to help since I did not reaffirm. The only suggestion I would make is to see if the bank is going to put anything on the modification paperwork about reaffirmation after the BK. You may or may not want to do this. The difference is if you doreaffirm you will still be legally responsible for debt on the property after the BK.
I am waiting to hear if they approve me but from what I read on the sight I do not think they will. Looks like we will be walking away...but on the bright side of things it will not affect my credit
Please provide an update as I am interested to hear how this works out for you...Good luck.

[mami2four]

I was behind over a year on my cc when I applied for a mod, did the three month trial and was approved for the permanenr mod on sept 1 when I made the new 1st pmt, I filed for bk on sept 25th and had no issues

[calgirl67]

We have not paid our $100k credit cards for 10 months now. We applied for a HAMP mod with Wells Fargo, they turned us down in Aug, we reapplied in Sept and they approved us for a 3 mth trial mod. On payment #2 now and last payment is due Dec 25.

We are praying they approve it permanently. If they do we will file Ch 7 after the mod is finalized. If they deny us we will have no choice but to file Ch 13 because if they deny you then you are behind in the difference in what your original payment was and the trial payment was. And we just don't have all those thousands of dollars lying around.

There are SO many people in the same boat as us. Need their home mortgage modified AND need to file to get rid of the unsecured debt.

I got so many different stories from Wells Fargo when I called (on many occasions) to find out how filing Ch 7 during the trial period would affect our modification.

We just decided to wait until they finalize or deny it and then file a 7 or 13.

[midnight]

I'm with Wells Fargo too and was just offered a HAMP program with them. I wish I could wait to file but Chase filed a lawsuit against me and need to file by the end of the month. Only thing is with the new mortgage payment I don't pass the means, but with the old payment I do. I talked to Wells Fargo and they told me I should list the original payment because the loan mod may not go through and it's just an agreement that's a 'trial basis' and doesn't mean it will be accepted. Also have a couple different reps tell me that Chap 7 WON'T affect the loan mod but a few said that it WOULD terminate the HAMP and revert back to the original payment. So who knows. All so confusing and frustrating.

[DeadManCrawling]

Midnight, this could be an issue, since BK court must use actual numbers from the 6 month lookback. I would carefully discuss this with attorney before filing. You may be able to and need to, get some other expenses to fill the gap. Term life insurance is an old standby as long as not too expensive. 401k funding, medical, dental, anything to reduce the DMI during that period to the level that gets you past the means test.

[midnight]

Deadmancrawling - so you think I should put in the original loan mod payment amount even though that mod plan was "broken" according to Wells Fargo?? My attorney says we are his first case with this situation. I'm ptetty sure We still pass the means with the payments I made on the first/revoked loan mod plan. This is all so confusing.

[DeadManCrawling]

Discuss with the attorney, ask for advice on this board and any others you belong to.

My point is this: the court will use ACTUAL expenses. If you put down your OLD mortgage expense, they will simply look at your account and see that you are not paying that number. Even if it IS just a trial period this could cause problems.

If you can STILL pass the means test, with the lower mortgage expense, you're okay. If the lowered mortgage lowers your income to cause you to fail the means test you could be forced to a chapter 13.

Tread carefully, research this, it could change everything. I don't mean to worry you unneccessarily, but you need to be aware of this. It is nice to have a lower mortgage, but the court will see it as extra money that could be paid to creditors.

[midnight]

I spoke with my attorney and we ended up using the payments we actually made. So thanks for that.