Went to firs interview thinking on filling for chapter 7 but... please read

[aish]

The lawyer we had interviewed with said he'll do the best he can for us to keep our house, we owe 89,000 on our 1st mortgage and 49,000 on our second mtg. $15,000 on credit cards, and our only asset is a paid off truck (our only transport) valued around 10,000.

He said we wont loose our truck, we would sure be dicharged from credit card debts BUT,
*we have to call at least two different realtors pretending we want to sell our home to find out the present value of it,
-that way if the home is worth less or around what we owe on the 1st mortgage, we would be filling out chapter 13, our 2nd mtg would be discharged and would work with a payment plan to get current on it.

BUT IF the house has some equity on it then we are recommended to file chapter 7 and will loose the house, if we keep it then we'll still have 2nd mortgage, but would still keep the truck.

This lawyer seems like a good person, I also checked him on BBB before scheduling the first app and everything seems good. 25 years on the field, He handles chapter 13 only charges $3500 for the case, $1500 due at the beginning the remaining would be included on the repayment plan.
His Son, 10 years on the field, same office, handles chapter 7 only and charges $1500 for the case, $800 due at the beginning.


what do you all think about this?
or what do you recommend?

edit:
we live in CA, married one child, the last house they sold by my street (same old, same kind) was a foreclosure one sold for $89,000, but I went to realtor.com and the median is $129,000, I still have to call realtors tomorrow to check that out, I'm sorry I don't understand the last two questions... I'm new to all this...

[LALADY]

What state are you in? What do you think the house is worth? What equity do you think you have in the house? What is your state or federal exemption for the house? Do you have any homestead exemption?

[aish]

What state are you in? What do you think the house is worth? What equity do you think you have in the house? What is your state or federal exemption for the house? Do you have any homestead exemption?

we live in CA, married one child, the last house they sold by my street (same old, same kind) was a foreclosure one sold for $89,000, but I went to realtor.com and the median is $129,000, I still have to call realtors tomorrow to check that out, I'm sorry I don't understand the last two questions... I'm new to all this...

[tigergem]

I think you can find comparable sales on zillow.com. If you talk to a real estate agent, what you want to ask for is "comps" preferably within a 2 mile radius of your home. And ask for at least 4 "comps"... not less than that.

[aish]

I think you can find comparable sales on zillow.com. If you talk to a real estate agent, what you want to ask for is "comps" preferably within a 2 mile radius of your home. And ask for at least 4 "comps"... not less than that.

thank you very much tigergem, I went to zillow and last property sold was 89,000, but there are others for sale (form years ago, and not selling) for around 125k to 150k, I told lawyer but he said he still needs more opinions and to call realtors... he wants to make sure it's really worth that much before we file, so there are not surprises later.

[LALADY]

The California homestead exemption, I believe, is $50,000.

As for your home exemption, you must choose which system you're going to follow to protect your assets. See here. You don't get to pick and choose between the two.

http://www.thebankruptcysite.org/exemptions/california.html

It sounds like you are in the same boat I was. Zillow didn't work in my case because it's values were old and stated the house was valued $100K over what it was actually comp'd at.

[aish]

The California homestead exemption, I believe, is $50,000.

As for your home exemption, you must choose which system you're going to follow to protect your assets. See here. You don't get to pick and choose between the two.

http://www.thebankruptcysite.org/exemptions/california.html

It sounds like you are in the same boat I was. Zillow didn't work in my case because it's values were old and stated the house was valued $100K over what it was actually comp'd at.

I'm starting to understand all this stuff I did a research about california homestead exemption and since 01/2010 its 75,000 for a single person, 100,000 for married coupe (which is our case) etc...

http://lawprofessors.typepad.com/bankruptcyprof_blog/2009/10/california-homestead-exemption-increases-january-1-2010.html

The only thing I don't understand is....

if we are lucky enough to keep the house on chapter 13, because of the low value and 2nd mortgage gets deleted then ....if in the future house gets some equity, will the 2nd mortgage return????
or 2nd just goes away as CC ???

[BCA2009]

Doesn't sound like you need to worry about the homestead exemption at all because you have no equity in the house. You owe 138K on it and none of the estimated values are that high. So you don't need a home exemption.

So if you want to file Chap 7 you can keep the house if you are current on the payments. But you will have to pay both the first and the second. (unless you can settle the second after discharge).

If you are totally upside down on the 2nd, it's possible to have the lien striped in Chap 13, but there is a catch, the second becomes just another unsecured debt that has to be figured in with the other unsecureds that you would be paying on in your chap 13 plan. You only have 15K in credit cards, so depending on how much disposable income you have you may end up paying some of the second mortgage as unsecured debt anyway. But only for 5 years. This still might be the best way to go. Do you know how much disposable income you expect to pay into the Cahp 13 plan?

And FYI: Chap 13 only lawyers try to steer people to Cahp 13. And Chap 7 only lawers try to push peaple to Chap 7. Make sure you get serveral consultations before you make your decision.

[liz417]

I agree with "BCA2009", consult a few more local BK attorneys. My 1st attorney was pushing me towards a ch 13 and at the time I took his word for it because didn't know any better I found this site soon after retaining him and learned a lot more about the BK process. You can keep your house regardless of which chapter you file and I'm in CA too and our Trustee accepted "Zillow Values" as proof.

[aish]

I got the first comparative value today, I gave all the info so the realtor could research, he just called and told me that the present home value is between 89,000 and $95,450, the reason he's giving an in between it's because of the last house sold that was similar in age and sq ft then mine. ( I never thought I would be happy knowing my house was worth less then we paid for it! )

I called another realtor and she's coming at 2:00 pm to check out the house and give me an accurate value for free.

How much should the house value be for the second mortgage to be deleted/stripped or whatever it's called... on C13???

[BCA2009]

I got the first comparative value today, I gave all the info so the realtor could research, he just called and told me that the present home value is between 89,000 and $95,450, the reason he's giving an in between it's because of the last house sold that was similar in age and sq ft then mine. ( I never thought I would be happy knowing my house was worth less then we paid for it! )

I called another realtor and she's coming at 2:00 pm to check out the house and give me an accurate value for free.

How much should the house value be for the second mortgage to be deleted/stripped or whatever it's called... on C13???

Totally unsecured. The value of the house should be less than the first mortgage amount.

[aish]

Thank you for answering my question! I'm new in this and totally lost...

well The other realtor came and gave me a CMA report, she said value is $95,000 at the most, which is same as the other realtor told me....

well that doesn't work either.... I think we'll have to give up the house too.... and file for Ch 7..

am I right?

[momofthree]

This is just me thinking out loud, but if you didn't pay on your mortgage for a few months, couldn't you bump that first mortgage balance up above $95k?

[BCA2009]

This is just me thinking out loud, but if you didn't pay on your mortgage for a few months, couldn't you bump that first mortgage balance up above $95k?

Aish needs the balance to go the other way. The value of the home needs to be below the payoff on the first to get the second stripped.

[momofthree]

Aish needs the balance to go the other way. The value of the home needs to be below the payoff on the first to get the second stripped.

That's what I just said. If she stops paying the mortgage, the balance will go UP, while the value stays the same.....