Please provide some insight/feedback/suggestion on the following scario:
I and my wife both filed for chapter 7 bankruptcy. We had our 341 last week. Went smoothly. We have a car with $3-4K value above our $2500 exemption. Surprisingly Trustee did not say anything about the car during 341 (whether he wants to keep it or wants us to buy from him). We have a 2nd car with loan against it and we are keeping it. We are doing a "retain and pay" on our home. Will not reaffirm. We are behind in 1st mortgage by 6 month and just completed 3rd trial payment of HAMP mod. Hopig to get a modification before the discharge. We owe $93,000 on 2nd mortgage. We could strip the lien in a chapter 13 but we did not want to go through a 5 yr plan and live under microscope of trustees. So decided to gamble with the house. We will stay in the house if 1st mortgage offers a mod. If not we will move. During 341, Trustee did not say since we are behind on first, we should surrender the house.
After 341, I have sent the following e-mail to my 2nd mortgage's collection law firm:
************************************************
Hi Ms. X:
I talked to you over the phone a few minutes ago. Attached is the letter of consent forwarded by my attorney so that you can negotiate with me.
We qualified for chapter 7 and we have included the property as well. I am trying to see if we can get our principal mortgage modified (doing a 3 month HAMP trial mod now) and if we can do a one time settlement with you for about 5% of what we owe to you (We have about $5K in cash that survived as our combined exemption). We can't afford a monthly payment over a period of time because our finance won't allow it. I could file for a chapter 13 and strip the lien based on the current market valuation but again I can't afford a 3-5 years plan. So we decided not to even if it would have allowed us a complete lien strip of our 2nd mortgage from the Credit Union.
Please let me know if you are interested in a one time settlement by releasing the lien so that you recover something and we can keep the house. Otherwise, we are not current in either 1st of 2nd mortgage. The house is in foreclosure by 1st mortgage. Trustee won't allow us to keep it since we are not current and we don't have any approved work out plan from the 1st or 2nd position. In that case, we will let the house go. It will be foreclosed by 1st mortgage co and 2nd position will get nothing. You can't come after us because our personal liability will be discharged in BK.
Please give me a call at XXX-XXX-XXXX in case you would like to discuss a potential settlement. My wife is out of work, we have one income to support a family of six. We can't afford a monthly payment. So modification is not an option. Thanks in advance!
Regards,
*************************************************
The collection law firm of 2nd mortgage sent me this letter (they also sent an official letter, cc'd my BK attorney so that their agreement to accept $5K and release the lien is documented):
Mr. X, CU will accept your offer of $5,000.00. Please forward your check made payable to this law firm to the attention of the "collection department". It would be much appreciated if you could send it by the end of the month.
We will then issue a Satisfaction and file the same in the clerk's office.
If you have any questions, please call or email me.
Thank you.
************************************************** ***
Should I proceed? Should I wait to see if I get my primary 1st mortgage modified? If first decide to foreclose, I will be paying $5K for nothing. If 1st allow a mod, I can live in the house with 2nd's lien on the property as long as the house value remains within 1st mortgage's balance and 2nd finds no reason to foreclose. Does the language of 2nd mortgage's letter state clearly that the mortgage will be completely satisfied and credit union will have no further claim/lien on property?
But if 1st offer me a permanent mod (I don't know yet) and we decide to keep the house, this $5K will free the house from 2nd. I can get the same deal later as well. But it won't get a better deal (5% of what I owe to them).
THANKS in advance for your feedback. This forum was a great help throughout the process.
I and my wife both filed for chapter 7 bankruptcy. We had our 341 last week. Went smoothly. We have a car with $3-4K value above our $2500 exemption. Surprisingly Trustee did not say anything about the car during 341 (whether he wants to keep it or wants us to buy from him). We have a 2nd car with loan against it and we are keeping it. We are doing a "retain and pay" on our home. Will not reaffirm. We are behind in 1st mortgage by 6 month and just completed 3rd trial payment of HAMP mod. Hopig to get a modification before the discharge. We owe $93,000 on 2nd mortgage. We could strip the lien in a chapter 13 but we did not want to go through a 5 yr plan and live under microscope of trustees. So decided to gamble with the house. We will stay in the house if 1st mortgage offers a mod. If not we will move. During 341, Trustee did not say since we are behind on first, we should surrender the house.
After 341, I have sent the following e-mail to my 2nd mortgage's collection law firm:
************************************************
Hi Ms. X:
I talked to you over the phone a few minutes ago. Attached is the letter of consent forwarded by my attorney so that you can negotiate with me.
We qualified for chapter 7 and we have included the property as well. I am trying to see if we can get our principal mortgage modified (doing a 3 month HAMP trial mod now) and if we can do a one time settlement with you for about 5% of what we owe to you (We have about $5K in cash that survived as our combined exemption). We can't afford a monthly payment over a period of time because our finance won't allow it. I could file for a chapter 13 and strip the lien based on the current market valuation but again I can't afford a 3-5 years plan. So we decided not to even if it would have allowed us a complete lien strip of our 2nd mortgage from the Credit Union.
Please let me know if you are interested in a one time settlement by releasing the lien so that you recover something and we can keep the house. Otherwise, we are not current in either 1st of 2nd mortgage. The house is in foreclosure by 1st mortgage. Trustee won't allow us to keep it since we are not current and we don't have any approved work out plan from the 1st or 2nd position. In that case, we will let the house go. It will be foreclosed by 1st mortgage co and 2nd position will get nothing. You can't come after us because our personal liability will be discharged in BK.
Please give me a call at XXX-XXX-XXXX in case you would like to discuss a potential settlement. My wife is out of work, we have one income to support a family of six. We can't afford a monthly payment. So modification is not an option. Thanks in advance!
Regards,
*************************************************
The collection law firm of 2nd mortgage sent me this letter (they also sent an official letter, cc'd my BK attorney so that their agreement to accept $5K and release the lien is documented):
Mr. X, CU will accept your offer of $5,000.00. Please forward your check made payable to this law firm to the attention of the "collection department". It would be much appreciated if you could send it by the end of the month.
We will then issue a Satisfaction and file the same in the clerk's office.
If you have any questions, please call or email me.
Thank you.
************************************************** ***
Should I proceed? Should I wait to see if I get my primary 1st mortgage modified? If first decide to foreclose, I will be paying $5K for nothing. If 1st allow a mod, I can live in the house with 2nd's lien on the property as long as the house value remains within 1st mortgage's balance and 2nd finds no reason to foreclose. Does the language of 2nd mortgage's letter state clearly that the mortgage will be completely satisfied and credit union will have no further claim/lien on property?
But if 1st offer me a permanent mod (I don't know yet) and we decide to keep the house, this $5K will free the house from 2nd. I can get the same deal later as well. But it won't get a better deal (5% of what I owe to them).
THANKS in advance for your feedback. This forum was a great help throughout the process.
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