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Home loan modification and chapter 7

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    Home loan modification and chapter 7

    Hi

    I posted earlier about deciding to keep the house while filing chapter 7. We didn't file as of yet, but we retained the lawyer a while ago, and stopped paying all creditors per his advice.
    originally we meant to let the house go as well, but recently changed our minds, and called the mortgage bank about curing the loan. Since we already had one loan modification under HAMP program, they agreed to try and do a Fannie Mae modification, and currently we are in the process of faxing and mailing information back and forth. Our lawyer advised us not to let Bank of America know about us filing chapter 7, but the way i see things, once they pull our credit history and see how much money we are supposed to be paying each month to credit card issuers (not to mention the fact that we are late on all the credit cards), they will pull a plug on loan modification, which we so desperately need. He said that we shouldn't let them know that we are filing for BK, and if our loan mod fails now, we should try once it gets discharged, but i am concerned that if they decline modification now, they might not be willing to try 3 months from now. He was speaking about something called motion to stay, or something like that (my husband had consult with him), and that if we let them know about chapter 7 they may want to lift that.
    But i don't understand why would they if they are not included in our BK case? I think we have huge chance of keeping our home, but monthly obligations to our creditors still listed in our credit history might really mess this up for us....

    #2
    Any insight, anyone? I could really appreciate some advice....Thanks

    Comment


      #3
      The "motion to stay" is the time frame during your bankruptcy proceedings in which the creditor (the lender) can't proceed against you to collect the debt (foreclose) unless they file a legal motion to do so. This buys you time.

      Your attorney is suggesting to not notify your lender of your bankruptcy for a reason..however, your lender will receive a copy of your bankruptcy filing, so them not knowing about it is just temporary.
      Filed Chapter 13 02/2006 - Confirmed 05/2006 - Discharged 09/2011
      I'm not an attorney. My replies are merely suggestions or observations, not legal advice. As always, consult with an attorney before making any decisions.

      Comment


        #4
        They will not take your house as long as you pay the mortgage. The consensus on the Forum is do not reaffirm your mortgage but to "pay through". As long as you keep current they cannot lift your automatic stay and foreclose. However, after your discharge, if worse comes to worse in this economy, you have bankruptcy protection to walk away from the house and mortgage. If you reaffirm, they can sue you, take the house and you are stuck with the deficiency. Read all the stickies on foreclosure and C7.

        BTW, welcome to the Forum. 'Hub
        If I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.

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