About to file chapter 7, have questions about mortgage.

[itsybuggy]

Hi

We are signing our petition two days from today. originally we informed our attorney that we want to include our home in BK, but since then we changed our mind and decided to try and keep it. Our loan was modified year ago, but we defaulted again in March, and so far missed 4 payments. After talking with my husband and weighing all our options, we came to conclusion that we really don't want to move, and even though we are unsure if we can keep our house and modify the loan yet again, we would like to try. Since we are signing the petition on thursday, will it be too late to talk to him about it? I have no way of reaching him before our appointment. Do we HAVE TO include our mortgage in chapter 7? He already told us that we will end up with having BK and foreclosure on our credit report anyways, so we figured that we can walk away any time then, if we are unable to keep our home.
Is petition signing appointment way too late to do anything about this?

Also there is one more thing i heard once but i doubt it's true. Someone told me that sometimes a judge can influence a bank to lower the monthly payment if someone is going thru BK? It sounds too good to be true...

Thanks in advance

[Meatstick]

Considering what you have posted above unless you have equity in your home you should include it in the BK. You can keep on paying and stay as I am and if money problems come again you can just walk away. If you re-affirm then you are on the hook.

[stratos]

You don't have to surrender your house in your chapter 7. (And you don't have to sign the petition and file right now if you aren't ready to. By all means, if you aren't in an emergency situation, tell your attorney your concerns and let him/her know you need more time before you file. Once you file a chapter 7, there is no automatic out.)

However, if you want to file chapter 7 and keep your house, you need to be current on your payments when you file. Unless there's a specific agreement in place with the lender, if you're behind when you file, the bank will file a motion for relief from the bankruptcy stay, and they will get it. Which means they will be able to begin foreclosure proceedings.

If you can get current before filing, and if after your other debts are discharged, you can afford the house payments, then do that. If you can't get current before filing, but you could pay the house & arrears over time in a chapter 13 plan, do that.

But if you can't afford the house, and here's where you have to be brutally honest with yourself, let it go in the Chapter 7, get your other debts discharged, and move on with your life, living in a place you can afford, that won't be a constant source of stress.

[debee]

will it be too late to talk to him about it? Do we HAVE TO include our mortgage in chapter 7? He already told us that we will end up with having BK and foreclosure on our credit report anyways, so we figured that we can walk away any time then, if we are unable to keep our home.
Is petition signing appointment way too late to do anything about this?

The appointment is not too late to tell your attorney that you want to retain the house rather than surrender it. He can amend that before filing it.

Whether you intend to keep or surrender secured property, you still list the debt in the petition and receive the discharge. As meatstick already advised, don't "reaffirm" the debt. That way you can walk away in the future if needed.

BTW, noone is seeing both a foreclosure and a bk on their credit reports. Only the bankruptcy has been showing up.

Welcome to the forum!

[sh9730]

Ok, just to make sure when you say "include" - you mean wether you try to "reaffirm" the mortgage. You MUST include all debt, and a mortgage is a big one obviously. Now, if what you meant that was when you filed the paperwork you indicated you were going to SURRENDER the house (thereby allowing them to foreclose), that is different.

Two things involved here, first, I am not sure what the procedure to change your indications from SURRENDER to REAFFIRM, but Im sure your paperwork can be amended.

The more difficult part is the fact you are behind. I am in the same situation as you, except I indicated from the beginning I wanted to try and keep the house, and I never had an earlier modification. IF you are somehow able to get enought money to bring the mortgage current before discharge, that would be the easiest thing, then you just keep paying and they cannot foreclose even if you DONT reaffirm the loan, which many here would reccommend that you dont (see the thread in the sticking about reaffirming being a bad idea).

I am also behind 5 months, but I will NOT be able to get current before discharge, but I am in review for a loan modification. I will not be reaffirming. If I get the loan mod, great! If I can get a repayment plan to catch up on the late payments, great! But I realize there is the chance none of it will work out and I may lose the house since even if I wanted to reaffirm, I cant since I wont be current before discharge.

SO, bottom line is, you should be able to amend the BK paperwork to reflect your desire to try and keep the house. Whether you are actually ABLE to keep it, is another question entirely.