Any help...situation I haven't read on here

[dubogey]

I stopped paying my mortgage in Sept. after mortgage company turned down any kind of loan modification/deed lieu. Bank sale is scheduled for Feb 23. I have about $3000 credit card debt and im about $3500 upside down in my truck. The bank sale of the condo will probably come up $20-40K short of what I owe. Since Sept I moved out and have been living at my parents paying no rent and spending no money and have saved about $7500. I have about $2000 of furniture in storage and that is about all. I have spoke to a lawyer who will handle the bankruptcy, I just won't be able to speak with him til later this week. Also I'm in VA what do you guys think?

[OhioFiler]

What do we think about what? Can you be more specific with your question?

[dubogey]

I guess my biggest question is the cash/bank account. I didnt even really notice I had saved up a little bit of money til the other day. What should I do with it if anything right now?

[StartingOver08]

Exempt what you can on your schedules. Check your state for your allowed exemptions www.legalconsumer.com

[OhioFiler]

Why are you pursuing bankruptcy? You don't have much debt and you're unsure of the deficiency on the house which you've already surrendered. I'd wait and see what happens to the house after the foreclosure before I considered filing bk.

[dubogey]

I also just learned VA has a "wildcard" exemption which should help. As far as spending money right now, any amount what is a no no and what is ok

[BobMango]

I also just learned VA has a "wildcard" exemption which should help. As far as spending money right now, any amount what is a no no and what is ok

I agree with OhioFiler, you would be ill served filing bankruptcy right now, based on what you've told us. If you let the home go and they pursue a deficiency judgment against you then you can file. Otherwise, I'd pay off the credit cards, keep paying on the vehicle and wait to see what happens on the mortgage.

[BKDefender]

I'll chime in too - I think you're premature in filing bankruptcy at this time. If you came to me with your situation I would try my best to dissuade you from filing.

Having said that, if you still insist on filing, you need to see if you can exempt your $7,500 cash. If you can't while it's in the bank account, take a look at putting it all into a Roth IRA. You can put $5k in to fund your 2009 Roth IRA up until tax day 4/15/10. You can then put the remaining $2,500 into a 2010 Roth IRA. You then file bankruptcy, and can withdraw the money shortly thereafter - but you'll pay a 10% penalty for withdrawing in less than 5 years. But if you can't exempt $7,500 and your choice is lose most of it or pay $750 to keep it, then it's worth it.

Again, it all depends on if you can't protect it.

--William

[dubogey]

I dont see anything else to do. I tried for months to work with the mortgage company and they wouldnt budge. Why wouldnt they pursue a deficiency judgement against me?? Another question I have is if during the bank auction what if the bank doesnt sell?

[momofthree]

Are you sure that you don't have a non-recourse loan? If it's non-recourse, they can't come after you.

[OhioFiler]

I dont see anything else to do. I tried for months to work with the mortgage company and they wouldnt budge. Why wouldnt they pursue a deficiency judgement against me?? Another question I have is if during the bank auction what if the bank doesnt sell?

The bank will buy the house themselves at the auction in no other bidder is willing to buy it for more than they have invested in it.

Why do you think they will pursue a deficiency judgment against you?

There is limited incentive for the mortgage holder or servicer to renegotiate with you and that is why they didn't budge.

[BKDefender]

dubogey:
The thought "You can't squeeze blood from a turnip" comes to mind. Why would a mortgage company spend money to pursue you for money that an asset search shows you don't have the ability to pay? It's a cost/benefit analysis - it can cost them more then they'll be able to recover from you, so it does not make economic sense to try to get from you what you can't give.

--William

[LadyInTheRed]

If they do decide to try to squeeze blood from a turnip and sue you for the deficiency, you can file BK after you are served.

If you haven't already, stop using that credit card!

[dubogey]

Thanks for all the in put....I dont use the credit card at all...if over a year. BKdefender or anyone...after auction can I contact the mortgage company to see what their plans are?? Can I request something in writing or anything??

[BKDefender]

dubogey: I don't know what state you are in, but in a lot of states there is a statute of limitations on actions for deficiency judgments. In Nevada it's 6 months from the date of the trustee sale. After that, the 1st mortgage is prohibited from obtaining a deficiency judgment or even suing you for the deficiency. A 2nd mortgage though, that did not do the trustee sale, generally has 6 years (in Nevada) to sue on a breach of contract claim since their note was not secured by any equity in the real estate (since the 1st was more than the value of the property.)

You should check your state statutes to see if they have a time limit.

Should you ask them what they want to do? Why? If they want to collect you'll be sued. If your state allows a long time to sue you for the deficiency, then you might consider filing bankruptcy to guarantee they can't come after you.

Good luck,
--William