I am pre-planning for what I believe will be an inevitable BK7 filling. I have several questions that I hope some of you seasoned BK veterans will help me out with.
First a brief overview of my situation. I am In So. Calif. and like most here my home is underwater by about 100k. I have a purchase money 1st with Citi bank for 107k and that I successfully modified about 1yr ago. I also have a 2nd mortgage with HSBC that was taken out 3 yrs ago to pay off a smaller purchas money second and to replace a roof and AC unit plus consolidate other debts. The balance on the 2nd is about 117k. Our home at the time of the 2nd was appraised for $330k but the Current Value is maybe 120k. Our other Debts are a 15k leased vehicle and about 12k in credit card debt plus about 4k in back taxes.
We have been working with our second Mortgage HSBC for more than a year and were given a 6 mos temp hardship mod and when it expired we reapplied for a permanent mod they only offered us another 6 mos hardship so after the first good faith payment we quit paying because we could not afford what they gave us and more importantly because they refused to give us a true permanent loan mod. We are now 5 + mos late and get calls almost every other day and I just keep telling them we are only interested in negotiating an affordable permanent loan mod or settlement offer. I wont go into all the details but it has become pretty apparent that we are not going to get anywhere until they decide to charge off and than maybe we could settle with them but I doubt we could come up with even 10%. The good news I guess is that they are very unlikely to foreclose because there is nothing to get without a deficiency judgment and a BK7 would end that. We are current and happy with our first lender. We can get by paying all of our other bills as long as we dont pay the 2nd. Ok sorry for the long story but I think its important that we put all the important facts on the table.
Now here is where it gets fuzzy to me, I am self employed my wife is permanently disabled and gets Social Security Disability plus a small disability pension form here last employer. My business is way off for the past 2+ years but still better than a bad job. After expenses Even with my wifes SS and disability income we fall under the means test as far as I can tell and even when I do the 2nd part of the means test we still seem to be well under the means test and qualify for a bk7. I am not interested in a BK13 unless its a last resort. I do not want to be in bandage for 5 yrs and the only reason to do it would be to try 2nd lean strip but We are real close to not quite making that anyways. My biggest concern is that I often have 5k or more in receivables and even though I file taxes on a cash bases it appears the trustee will consider them as assets. Since I have no home equity I will be filling under the system 2 plan where I get a $22,025.00 homestead exemption. I need to use most of that to exempt my paid for vehicles. I estimate I need about 18k in vehicle exemption and the state only allows $3425.00 so I would use a lot of the left over Homestead exemption there. I also have about 3k in bank accounts to run my business + our home account. So It gets real close to my max and I need some Ideas how to shield as much as possible without pissing off the trustee and triggering any objections. We are trying to stay in the home and ride thru the first and hoping to settle the second in time. Or worst case if they decide to try a foreclosure eliminate any future debt.
Looking for any pointers of advise besides the usual go talk to a lawyer LOL.
Dave
First a brief overview of my situation. I am In So. Calif. and like most here my home is underwater by about 100k. I have a purchase money 1st with Citi bank for 107k and that I successfully modified about 1yr ago. I also have a 2nd mortgage with HSBC that was taken out 3 yrs ago to pay off a smaller purchas money second and to replace a roof and AC unit plus consolidate other debts. The balance on the 2nd is about 117k. Our home at the time of the 2nd was appraised for $330k but the Current Value is maybe 120k. Our other Debts are a 15k leased vehicle and about 12k in credit card debt plus about 4k in back taxes.
We have been working with our second Mortgage HSBC for more than a year and were given a 6 mos temp hardship mod and when it expired we reapplied for a permanent mod they only offered us another 6 mos hardship so after the first good faith payment we quit paying because we could not afford what they gave us and more importantly because they refused to give us a true permanent loan mod. We are now 5 + mos late and get calls almost every other day and I just keep telling them we are only interested in negotiating an affordable permanent loan mod or settlement offer. I wont go into all the details but it has become pretty apparent that we are not going to get anywhere until they decide to charge off and than maybe we could settle with them but I doubt we could come up with even 10%. The good news I guess is that they are very unlikely to foreclose because there is nothing to get without a deficiency judgment and a BK7 would end that. We are current and happy with our first lender. We can get by paying all of our other bills as long as we dont pay the 2nd. Ok sorry for the long story but I think its important that we put all the important facts on the table.
Now here is where it gets fuzzy to me, I am self employed my wife is permanently disabled and gets Social Security Disability plus a small disability pension form here last employer. My business is way off for the past 2+ years but still better than a bad job. After expenses Even with my wifes SS and disability income we fall under the means test as far as I can tell and even when I do the 2nd part of the means test we still seem to be well under the means test and qualify for a bk7. I am not interested in a BK13 unless its a last resort. I do not want to be in bandage for 5 yrs and the only reason to do it would be to try 2nd lean strip but We are real close to not quite making that anyways. My biggest concern is that I often have 5k or more in receivables and even though I file taxes on a cash bases it appears the trustee will consider them as assets. Since I have no home equity I will be filling under the system 2 plan where I get a $22,025.00 homestead exemption. I need to use most of that to exempt my paid for vehicles. I estimate I need about 18k in vehicle exemption and the state only allows $3425.00 so I would use a lot of the left over Homestead exemption there. I also have about 3k in bank accounts to run my business + our home account. So It gets real close to my max and I need some Ideas how to shield as much as possible without pissing off the trustee and triggering any objections. We are trying to stay in the home and ride thru the first and hoping to settle the second in time. Or worst case if they decide to try a foreclosure eliminate any future debt.
Looking for any pointers of advise besides the usual go talk to a lawyer LOL.
Dave
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