Converting to a chapter 7

[dego2274]

A year ago I filed a chapter 13 plan and its just not the solution. I had to do a 13 because my house had a 2nd mortgage from the same bank, so I was told. My car is included in my rapayment plan also. Can I covert to a chapter 7 and keep my car and house. If anyone can offer some advice, it would be appreciated. Thanks

[justbroke]

A year ago I filed a chapter 13 plan and its just not the solution. I had to do a 13 because my house had a 2nd mortgage from the same bank, so I was told. My car is included in my rapayment plan also. Can I covert to a chapter 7 and keep my car and house. If anyone can offer some advice, it would be appreciated. Thanks

If you are in arrears on your home, and want to keep it... a Chapter 7 conversion isn't going to save it! You must first come to a reality as to whether or not you even want to keep your home. Additionally, you may not qualify for a Chapter 7 discharge unless you actually intend to keep the home. Your car payments may have not been enough to really keep you current (since a car loan is magically "refinanced" during the Chapter 13). This could lead to a relief from the automatic stay for both your car and home.

These are complex issues.

Did you qualify for a Chapter 7 to being with? Are you in arrears on your home?

[dego2274]

I was behind on my 2nd mortgage. My lawyer advised I do a 13 to keep the house due to the 2nd mortgage being from the same bank as the first. My car was almost paid off when I filed, maybe owed 3500. If I decide to let the house go, how long until they forclose? I was told to be carefull not to be late at all while in this plan because the Mortgage company would move faster on forclosure. I wonder if I can make this a little easier and just let the house go, but pay my repay plan.

[justbroke]

It's difficult to gauge how long until foreclosure. It is true that you don't want to be late while in bankruptcy or after discharging the debt in a bankruptcy. The whole reason why they move faster during bankruptcy, is that they will lose real money. They have absolutely no recourse once that debt is discharged, so they can't just sit and wait.

Please know that if you're in a Chapter 13 and surrender your home, the amount you were getting for allowed expenses, may actually stay the same. More than likely, the payments that were going for the home, will be offset by your new rent expense with the difference going to the unsecured creditors. Always work out the numbers with your attorney. Keeping the home or not is the hardest decision for most. Just sit down and run the numbers again.

[sh9730]

But, depending on the situation, being behind on mortgage payments and doing a Chapter 7 does not GUARANTEE you will lose the house either. Yes, I completely understand that there is a much safer chance of keeping the house while in a CH7 if you are current, but there is nothing stopping the bank from doing a loan mod, or working out some other payment plan outside of the BK, even in a CH7.

I am currently in a CH7 and am in the loan mod process, and though I cannot guarantee success at this point (as many in the loan mod trap can attest to - BK or not!), I can say for a fact that nothing about being in CH7 PRECLUDES you from still keeping your house...its just not as straightforward and easy as if you are current....and the chances for success are lower....but not zero by any means.

Im chronicling my journey of being in CH7 and behind on mortgage over in the foreclosure section...

[dego2274]

Thanks for all the input. I guess I really need to sit down with my lawyer and run the numbers again. If I were to walk away from the house (because of no chance keeping it), I would just want to convert to a chapter 7. If I could convert to a 7 and keep the house, that would be great. The Chapter 13 doesnt allow me much room to save, therefore any financial emergency that occurs, is a big problem.. ex.. car repairs, house repairs etc.. I will say that in my case for my mortgage company not to work with me, would be a huge loss for them. My loan is only 8 years old and the housing market has really suffered in my area like many others.