Chapt 7, Second time, CC's 2 houses... ?'s

[momsgirl]

We've filed chapt 7 - 8 yrs ago when we lost a job, had cc's and reaffirmed on house.

Now we lost our job - had a new house - rented it out for the last 4 years, trying to pay cc's off (payed $3000 to them) and they jacked us big time, have a 2nd house where we are now... job is moving us back to old house area.

We are wanting to keep house that we are renting, a couple small cc's and file on the house here and a couple big cc's.

The houses are owned both by Bank of America, they bought out Countrywide. Will we have a problem with that?

Do we need to kick renters out before filing to show less income (the rent being gone) and the two house payments?

We obviously can't make it and with the job moving, we can't stay.

[tcreegan]

messy

Hi momsgirl,

Sounds like a mess......might want to get a good attorney on your side.

To help you out, we are going to need the state you are filing in
On the means test, are you under or over DMI If over, by how much?

If you owe on a cc, you cannot keep it out of the bankruptcy (at least not legally) Even if your are current with your payments. If you have a cc with a zero balance, you can keep it through the bk and start using it after you get discharged, that would work.

No mention of vehicles.....

Keeping the one house should not be a problem if you can reaffirm (as you have done before) Another strategy I have heard on these forums is to mark reaffirm on the statement of intentions, but never get the papers together from the lender and don't actually reaffirm. Keep making payment being sure to stay current. Some lenders let this happen and some don't. Some states have laws that protect this practice, some don't.

It is called a "retain and pay" or a "ride through"

Good luck with all this,

Tom in Colo

[SMinGA]

First things first: check your records and see exactly when you filed before. You cannot file another ch. 7 unless 8 years have passed since you last filed. If its been at least 4 but not yet 8, you can file a ch. 13.

What is your intent regarding the house you want to keep? (I know you said you have renters in it now.) Keep it as a rental property, or live in it yourselves? If you want to keep it as a rental, I believe you can as long as the rent coming in covers the expenses. If you plan to move into it, then giving your renters required notice is probably a good idea. Depending of course on your time frame for moving.

In terms of mortgage companies and filing, it does not matter if you have 2 properties with one lender and want to keep one and let the other go. Who you have as a lender is not significant.

You can't keep credit cards and file bankruptcy. When you file, you file on all debts. You may keep some secured items, depending on equity/exemptions/etc. but all unsecured/credit cards get listed. And even if you have something with no balance those creditors are likely to close your account anyhow at the next account review.

To determine really if 7 vs. 13 works for you, you'll need to assess net income, monthly bills and expenses. Where do you stand at the end of the month? (Not counting credit card payments, and not counting any secured items you're giving up.) It will also be useful to talk to a few attorneys.

One last thought - where you're living now and where you're moving back to for the job transfer, are these 2 locations in the same state?

[momsgirl]

I double checked and it was May 2002 - so we are just at 8 yrs.

We do have a vehicle and plan on reaffirming with it - its value is equal to what we owe (grand am) and its a low payment.


We were really wanting to reaffirm on cards to keep them since we just put things on them in the last 2 months... clothes and a table saw - didn't want to look suspicious or have them come take them.

The house we are keeping is in IA - we plan to move back into it once the renters are out. We are currently living in IL...

[frogger]

We were really wanting to reaffirm on cards to keep them since we just put things on them in the last 2 months... clothes and a table saw - didn't want to look suspicious or have them come take them.

Reaffirm if you want, but they will probably still close the cards. If you're going to file a 7, then do it and stop trying to pick and choose who you're going to pay.

Get that fresh start without the old strings attached.

[momsgirl]

I was just afraid of them saying it was abuse, since we just charged them

[SMinGA]

From this point forward, stop using the cards. If the recent charges were small amounts and/or for basic living expenses - its probably not going to be an issue.

If you are able to delay filing until you are back in the old residence, that may be wise. That way you'll know what your income/expenses will be going forward. I believe its 6 months you'll need to be there to file in that state. Have not looked it up to doublecheck though. You will not use Iowa's exemptions however. Here is the rule on exemptions:

If you have lived in current state for 2 years, use current state.
If not, where did you live from 2 to 2 1/2 years prior? Use the state's exemptions where you spent the majority of the time in that 6 month period prior to the 2 years before filing.

If no majority - such as not 90+ days in any one state in that 6 month period, use federal.

[mgmadara]

If you have a cc with a zero balance, you can keep it through the bk and start using it after you get discharged, that would work.

Don't count on this happening because it is rare to have a card survive a bankruptcy. Most cards with 0 balances will be closed as soon as the issuing company finds out about the bankruptcy.

[anime-chicka]

Bank of America does not reaffirm. They do ride throughs, unless something has changed since I filed. I do know their BK department reps leave a lot to be desired in terms of actually treating you like a human being. I swear, just getting an address to find out where to mail the payment made me feel like I was a criminal for even filing for BK.