Quitting part time job to qualify for Chapter 7

[kcfaninin]

There IS another real possibility.

You MAY, depending in district, judge and trustee, be able to claim the mortgage expense and work on your mod. Then, in a few months, after discharge, the mod may not go through. This is an increasing occurence.

Then you have successfully used the mortgage expense and been discharged. So the extra money is used on rent.

This is a very gray area, and new really, since the housing bubble bust, but it is something we discussed with our attorney. He said it was workable, since not even a BK trustee or judge can get major lenders like BoA and WF to move faster.

Our plan was this:

Claim the mortgage expense in CH 7 even though we were behind. Inform the court we wer working on a mod.

Wait throught he 341 and to discharge, while the lender repeatedly lost docs, filed for relief, and so on.

Discharge.

Wait 30 days and then WE start losing paperwork. Or simply decline the mod.

Ride the wave for 4-6 months while foreclosure proceeds. Save money. Rent a new place.

done.

This may not be workable where you are, but we are in foreclosure ground zero (Florida), and our attorney says he has used this strategy successfully dozens of times in the last year. Bottom line is the housing market is not improving and everyone, including BK courts, knows it.

This may take a stomach of steel, and may or may not work, but it is an option. Talk to your attorney. If this is acceptable in your district, it may be worth looking at.

So, based on our situation, do you think we might be able to keep the home? What if Chase makes us sign a reaffirmation? I'm concerned if we sign it, then they don't approve the loan mod after discharge, then we are stuck in a high mortgage again. We are currently in a trial modification.

Can we sign a reaffirmation with our current trial payment or would we have to sign it with the original loan payment? Our trial payment is acceptable and manageable.

Also, my husband doesn't want to send them any more money until after discharge. He's afraid they will foreclose anyway and that is money thrown away. Is that a wise thing not to pay even though Chase said they can't accept payments while we would be in BK? At least we would be showing intent to pay.

[lrprn]

Also, my husband doesn't want to send them any more money until after discharge. He's afraid they will foreclose anyway and that is money thrown away. Is that a wise thing not to pay even though Chase said they can't accept payments while we would be in BK? At least we would be showing intent to pay.

If the payments your husband wants to skip are your house payments, since you want to keep the home after filing, your mortgage payments **MUST** be up to date when you file. No exceptions. Skipping house payments at this time would be a very, very bad idea if you do want to keep the home.

You both need to sit down and take a cold, hard look at your finances for the future. Given how much you both will earn after you quit job #2 and file, does getting rid of your unsecured debt free up enough to make your mortgage payment if it doesn't get modified permanently? If the answer is no, then you are just delaying the inevitable. You won't feel any less stressed and overwhelmed if you start up job #2 again after filing. You won't feel any long-lasting relief from filing either.

I understand your wish to stay in the house and the neighborhood for your kids. However, if staying creates tremendous stress and anxiety trying to make a mortgage payment that you truly can't afford, then the kids don't benefit in the long run. A house is just a thing that can be replaced within 2-3years of filing Ch 7. You can't put a price on yours and your children's emotional health and well-being.

It's time to get cold and unemotional. Work the realistic figures and see where you stand. Then make the decision about what to do.

[kcfaninin]

If the payments your husband wants to skip are your house payments, since you want to keep the home after filing, your mortgage payments **MUST** be up to date when you file. No exceptions. Skipping house payments at this time would be a very, very bad idea if you do want to keep the home.

You both need to sit down and take a cold, hard look at your finances for the future. Given how much you both will earn after you quit job #2 and file, does getting rid of your unsecured debt free up enough to make your mortgage payment if it doesn't get modified permanently? If the answer is no, then you are just delaying the inevitable. You won't feel any less stressed and overwhelmed if you start up job #2 again after filing. You won't feel any long-lasting relief from filing either.

I understand your wish to stay in the house and the neighborhood for your kids. However, if staying creates tremendous stress and anxiety trying to make a mortgage payment that you truly can't afford, then the kids don't benefit in the long run. A house is just a thing that can be replaced within 2-3years of filing Ch 7. You can't put a price on yours and your children's emotional health and well-being.

It's time to get cold and unemotional. Work the realistic figures and see where you stand. Then make the decision about what to do.

We can afford to pay the trial loan modification payment that they offered us, but it isn't guaranteed to be approved after the 3 months. Chase says yes, others are saying Chase can't be trusted as they say one thing and do another.

Plus, it will be void once we file. Chase said we can reapply for the loan mod after BK. My concern is, what if we sign reaffirmation papers, get discharged and then Chase won't work with us? Then we are stuck with the high mortgage payment again and I'm back to working 2 jobs.

We don't know what to do. Should we be upfront with Chase and let them know our intentions to keep the home? Should we wait for the loan mod to be approved and then file? We live in a very small town. Apartments are few and far between and for a family of 5, it's next to impossible to find a 3 bedroom.

If we give up the house, won't the trustee put us in a Chapter 13? We will then have $2325/mo as disposable income if we don't have a mortgage payment.

[Amy26]

I think an important question here is what is the value of your home and what do you owe on it? Do you have equity or no?

If you are severely upside down on the home in a crappy market, then negotiating a mod may not work in your favor. I also believe I have heard that once you file most mortgage companies will cease any kind of mod you were working on before you filed. So, if you are upside down ... I can't see any reason personally to wanna hold on to this house.

This is what I did in my bankruptcy. I had a severely upside down condo. My mortgage payment was also right around 2,100. I had to surrender it... no doubts about it. In order to make up for the difference in expenses, my lawyer advised me to go out and find a rental ....the more expensive the better. Of course you may not be able to aim for expensive but it might behoove you to stop trying to make payments on the house, move out, find something that fits into a budget of keeping you in a 7 and able to support yourselves and then you can use the rent expense and surrender the house. This might also give you more wiggle room to wait a bit of time for the income to fall off.

I don't know where you are living but if it is anywhere like the area I live in... I could find something WAY nicer than my condo for way less than my mortgage would have been if I kept it. I had a 890 sq ft condo for that 2100 a month and I could go rent a house with a back yard for like 1500-1700 in this market. And in the same area/neighborhoods.

This is all just personal speculation and a "what would I do" scenerio of course.

[kcfaninin]

I think an important question here is what is the value of your home and what do you owe on it? Do you have equity or no?

If you are severely upside down on the home in a crappy market, then negotiating a mod may not work in your favor. I also believe I have heard that once you file most mortgage companies will cease any kind of mod you were working on before you filed. So, if you are upside down ... I can't see any reason personally to wanna hold on to this house.

This is what I did in my bankruptcy. I had a severely upside down condo. My mortgage payment was also right around 2,100. I had to surrender it... no doubts about it. In order to make up for the difference in expenses, my lawyer advised me to go out and find a rental ....the more expensive the better. Of course you may not be able to aim for expensive but it might behoove you to stop trying to make payments on the house, move out, find something that fits into a budget of keeping you in a 7 and able to support yourselves and then you can use the rent expense and surrender the house. This might also give you more wiggle room to wait a bit of time for the income to fall off.

I don't know where you are living but if it is anywhere like the area I live in... I could find something WAY nicer than my condo for way less than my mortgage would have been if I kept it. I had a 890 sq ft condo for that 2100 a month and I could go rent a house with a back yard for like 1500-1700 in this market. And in the same area/neighborhoods.

This is all just personal speculation and a "what would I do" scenerio of course.

We owe $288,000. Probably worth $230,000. Attorney said Chase would probably sell it for $140,000 if foreclosed upon. He said Chase would be crazy not to work with us on a loan modification.

It turns my stomach to think about moving our family to an apartment. The apartments in our area are mostly income based and we wouldn't qualify.

The rent in the finer townhouses would be about $1600 - $1800/mo. Our trial loan mod payment is $1650/mo. Doesn't make much sense to rent.

[Amy26]

Chase also has no incentive to help you... those loans are insured and backed up.... some mortgage companies would almost rather let you foreclose it so they can claim the loss and get the insurance money.

I really wish you luck in what you're doing but with a home that upside down I think it would take an act of God for them to agree to a principle reduction. Especially if you go into bankruptcy.

I personally think it makes more sense, but that's just me!

[OhioFiler]

Rare but this time I have to disagree with you OH. The reason we live and have a family is time for them.

DEATH, is natures way of telling us to slow down.

I believe this person is on the brink of disaster if she does not get some relief.

It is my opinion that she needs a rest and some relief. Then at her liesure, take time to work when she wants. I happen to know, (as my daughter is an RN) that they are so short handed that she could pick her hours. Now however, she has other problems that MUST be addressed just for mental health. ONLY my opinion. 'Hub

I was looking at this situation from the bankruptcy vs settlement option.

One concern I have is I see the OP continuing to struggle financially post-BK and still having to do the 4 12 hour stints. There are plenty of options between quitting and working that should be explored. Example: Would moving closer to the employer thus reducing the 2 hours of commute help? Can 3 12-hour shifts make a difference?