keep current on mortgage when filing chapter 7??!?!?!

[IamOld]

I hope this is the right place for this question - will be filing Ch 7 around 5/15. Is it 100% important that when that thing is filed that mortgage be NOT ONE DAY late?

OR is it ok if it's w/in 30 days?

OR just make sure that once Ch 7 is filed NOT one day late???

Mort=308K - house is worth (AT MOST!!!!) 220K (tax valuation 192K)

Morgagor...HSBC (formerly Household).

I cannot imagine that'd want this house back at this loss...

I NEED to keep the house...haven't anywhere else to go!!!

NEVER been more than 30 days late EVER.

[cofer22]

You want to stay current if you want to keep the house. If you read posts here; people either reaffirm thier homes or don't reaffirm, but usually can stay in thier homes if they are current. Other folks here can expand on that.
FWIW....I planning on filing in May as well and just stopped paying. I'm not planning on keeping my home. I'm trying to speed up the foreclosure process post filing to get my name off the deed...

[IamOld]

THank you!!!!!

THat's what I figured....although is "current" means not ONE day late, w/in the grace period before late fees apply, or be w/in 30 days?

If it's to be CURRENT - not one day late - I would probably have to take a loan from my 401k post filing...I am told that's not horrible AS LONG AS I can show that I used to pay - say - the mortgage, which I of course what I would do....

Any thouhgts on the above???

A trillion thanks!

[tobee43]

once you file your chapter 7...an auto stay effects all you creditors....so you must stop paying and they cannot make any attempt to collect the debt.....

at that time some...( and it's the worse idea ever to reaffirm your mortgage).....banks will ask for the stay to be lifted...i know it's difficult but ask you atty which they feel is the best way to handle the situation.

some people continue to pay if they have worked with the bank.......however, DO NOT sign anything about reaffirming the loan since if you do and your current situation changes you are stuck...also.. if you have equity, the trustee may want you to sell the house...there are all different scenarios which can take place. your atty should discuss all the options with you......but one that you must close your ears too is do not sign anything to reaffirm the loan......see the sticky des one of the best attys on the forum....his tread can most likely answer any question for you...best of luck!

[AngelinaCatHub]

THank you!!!!!

THat's what I figured....although is "current" means not ONE day late, w/in the grace period before late fees apply, or be w/in 30 days?

If it's to be CURRENT - not one day late - I would probably have to take a loan from my 401k post filing...I am told that's not horrible AS LONG AS I can show that I used to pay - say - the mortgage, which I of course what I would do....

Any thouhgts on the above???

A trillion thanks!

It is a terrible idea to break into your 401K. The tax hit and penalty will make you sick. If you reaffirm, that house, you will have to pay. You can rescind up to 60 days or better yet, "pay through" This is not a preferential payment as it is secured debt. However, if you cannot afford even another payment, you will fail your bk in that to keep that house, you will simply rob your 401K for a house you cannot afford and is not nor never was an investment. Sell the place if you can, or give it up. Rent or Rent to own a distressed property. There are plenty of them.

Search 401K and you will get the gist that nobody backs that use of exempt funds. Also, the minute you convert the funds, it is the Trustees and he can make you an asset bk and you could lose it. Ride the house out till your put out, or pay through, and even the "pay through" has to be approved, so, stop paying all unsecured debt and use the money for your mortgage if you intend to try keeping the house. Don't reaffirm it as if you STAY CURRENT they are not likely to take it. They want money, not another house. 'Hub

[IamOld]

Thank you

It is a terrible idea to break into your 401K. The tax hit and penalty will make you sick. If you reaffirm, that house, you will have to pay. You can rescind up to 60 days or better yet, "pay through" This is not a preferential payment as it is secured debt. However, if you cannot afford even another payment, you will fail your bk in that to keep that house, you will simply rob your 401K for a house you cannot afford and is not nor never was an investment. Sell the place if you can, or give it up. Rent or Rent to own a distressed property. There are plenty of them.

Search 401K and you will get the gist that nobody backs that use of exempt funds. Also, the minute you convert the funds, it is the Trustees and he can make you an asset bk and you could lose it. Ride the house out till your put out, or pay through, and even the "pay through" has to be approved, so, stop paying all unsecured debt and use the money for your mortgage if you intend to try keeping the house. Don't reaffirm it as if you STAY CURRENT they are not likely to take it. They want money, not another house. 'Hub

THANK YOU everyone for the replies - I cannot lose the house - my kids have known nothing else, and I would have to stay in the same place for school. Affording the mort itself is not a problem...issue is lawyer is EXPENSIVE and he'll need to be paid. Worst thing comes to worse, have to wait until 5/15 to file instead of 5/1 - 2 more weeks won't make a difference...(I hope) so that Mort is paid for May, and then on paid by the 1st of each month.

Equity - NONE - mort=$308,000 - house - AT MOST - $225K at MOST!!!!

[Freddy03]

When I file my Ch 7 in a few weeks (I hope) I will be less than 30 days late on my mortgage. I do NOT plan on reaffirming it b/c we are 100K underwater. I do intend to "pay and stay" as long as we can. My attorney told me it's very very unlikely my mortgage company would start the FC process being only one payment behind.

Good Luck to you.

[IamOld]

Phew - that's good to hear - the thing is by the time they get the "papers" they'll have received the payment.

THANK YOU!!!!!

Could I ask-did your atty say whether or not your mortgage co will "turn off" your ability to pay them through THEIR website? (That's how I pay mine.)

I will have to do whatever it takes to stay - reaffirm - then we reaffirm - my kids know no other place...

Did your (or anyone else's) lawyer by any chance say anything about borrowing from 401k AFTER filing to pay mortage? Lawyer is pretty expensive...would need to borrow $1200 and pay it directly to mort - so I can/could show where it's going...

[help1234]

Yes, they will turn off your ability to pay thru their website. We set it up thru our banking "billpay" to be electronically sent to them. After discharge, I requested to make payments on their website again and was told we could not since we did not reaffirm debt. However, 5 months after discharge, I noticed that the ability to pay on their site was turned back on. My payment is due on the 1st and they usually get it around the 5th. So far, no problems.

[IamOld]

THANK YOU very much HELP1234 - that is to me really stupid - sure, go ahead, make it harder to pay - I think I"m going to go with 2 day USPS Priority Mail - I don't think HSBC is electronic with anyone!!!! Did they send you something to show that they were crediting your payments?

So 5 days doesn't see to bother them, eh? ALso, if I could ask - when you physically actually filed - had you already paid the mortgage for THAT month??

[help1234]

I KNOW!!! We want to pay and they make it even harder!!! We filed on May 10, 2010, so yes, they had that months payment. We did not receive anything stating they received payments, but the first couple of months I called to verify that they had. It was a bit of a pain, but peace of mind for me. After the discharge I was allowed to see "information only" statements online and could see where payments were applied. Then we magically were able to pay online again. Not sure exactly when that happened because I was not notified, just checking to see if they had credited the previous payment and it was available.

[snjphotoguy]

Its my understanding that you must be current with your mortgage. My wife and i did a ride thru and when we went to the 341 the trustee wanted proof that the mortgage was paid to date. I dont no if all trustees do but ours did. Do not Reaffirm, with the mortgage info you posted do a ride thru !!!!!!

[jcj112562]

Just a two cent opinion, but there is no reason under god's green earth to reaffirm a mortgage...yes, it is "the only place the kids have ever known". Are they somehow incapable of living inside 4 different walls and under a different roof? Is there not another accredited educational institution anywhere on the planet where they can get what is needed? This is, and should be, completely a business decision, nothing more or less. The sooner you begin to look at this with that in mind, the better off you will be. Of course, you may or may not heed this, but I am putting it out there, and whatever you decide, good luck.

John

[tobee43]

i know it's confusing.....if you want to keep your house and it's odd if and when a trustee asks for proof one is up to day in payments when one goes on line and can't make their payment!!!!

however, i'm with john....do not reaffirm....one never knows what the future brings.

[csonly]

IamOld - I just want to give you my personal experience on this issue----I used my mortgage payment (big mistake) to pay the attorney to file, so when we filed, my mortgage payment was less than 30 days late, once it got over 30 days late, mortgage company filed motion for release of auto stay, which was granted. We scrambled to gather up enough money to get our mortgage current because we also have no intentions of leaving our home. As far as the payments being on time, one day late or anytime in the grace period, I think each mortgage company has their own rules on that in a BK situation. I called the mortgage company every month to make the payment so it would be posted the same day and not take any chances. We are still waiting to be discharged and I have regained access to my online account for about 2 months now. As I said, using our mortgage payment to pay the lawyer was a big mistake, most of my unsecured debts were only 30 days late or less, and I feel like we rushed into filing just to stop the harrassment of the phone calls, another mistake. I work from home, so the calls interferred with my production of income. So, my advice, don't rush into filing and keep your mortgage current NO MATTER WHAT!!!