CH 7 and strange foreclosure situation...

[blucat13]

My house has been on the market for nearly two years, and I've been trying to do a short sale for the last year and a half. The house is underwater by $46K. For the last year I've not been paying the mortgage (25% salary reduction on an already tight budget). The foreclosure process was started by BOA, but put on hold by them until the short sale was worked out. It now looks like the buyer is being denied a loan, so the short sale is not going to happen. Now, I do not have a final foreclosure date yet, but likely within the next month since this is a continuance of a process started awhile ago.

Q: If I decide to do CH 7, do I need to do this NOW before the sale date, or wait until the bank comes after me for deficiencies after the sale???

I have some CC debt (about $7K) as well, which is not enough to qualify me for a Ch 7 by itself, but if they come after me for the deficiency, my debt will skyrocket to likely well over $50K.

Any thoughts?

Tami

[newbie2]

My house has been on the market for nearly two years, and I've been trying to do a short sale for the last year and a half. The house is underwater by $46K. For the last year I've not been paying the mortgage (25% salary reduction on an already tight budget). The foreclosure process was started by BOA, but put on hold by them until the short sale was worked out. It now looks like the buyer is being denied a loan, so the short sale is not going to happen. Now, I do not have a final foreclosure date yet, but likely within the next month since this is a continuance of a process started awhile ago.

Q: If I decide to do CH 7, do I need to do this NOW before the sale date, or wait until the bank comes after me for deficiencies after the sale???

I have some CC debt (about $7K) as well, which is not enough to qualify me for a Ch 7 by itself, but if they come after me for the deficiency, my debt will skyrocket to likely well over $50K.

Any thoughts?

Tami

No need to rush and file. Do it when it is best for you. It doesn't matter if you wait until the home has been fully foreclosed upon or if you do it prior to the foreclosure. Either way the personal obligation for your note will be discharged.

[angles]

Tami,

Consider the rules for filing a 7 - means test, household income, your personal finances, etc so that you can come up with a strategy based on your situation. Also consult with a few attorneys to see what they say. The consults should be free.

From your post it sounds like you are expecting a deficiency judgment from B of A? Are you sure they would do this rather then negotiating a settlement? In the short sale process the banks like to see your financial information and if it does not look good they may be willing to work something out. Allowing you to short sale itself implies that they believe you cannot afford the house and do not have any disposable income. The only reason I bring this up is if you can work something out with them you may not need to file.