Converting to a 7, please advise.

[mylife]

We are currently behind on our mortgage which we had planned to get caught up in the 13 but it's not working out so we're thinking of converting. In speaking with the mortgage company we were advised that although behind we would not be in danger of losing our home. We applied for a mod and was told that if approved it would be caught up that way but if not they would work something out. In your experience is this true. Another thread said that we would have to surrender. Also, if we surrender our car, how soon do they usually pick it up? We will definitely need another vehicle but not sure of how long it would take to get financing.

Thanks!

[LadyInTheRed]

The only way to be certain to avoid foreclosure is to catch up on payments before the Chap 7 is discharged. From what I've read, what a representative tells you on the phone may not be what the mortgage company actually does. They may try to "work something out", but they may not offer something that is feasible for you. They also may deny your mod and start foreclsoure right away. It's hard to predict what will happen for you. Some people get great modifications that allow them to stay in their home. Others get the run around for months only to eventually lose the home anyway.

[mylife]

Thanks Lady!

[justbroke]

It's a strategy for sure. I did the same exact thing. I swapped which (investment) property I was surrendering in my Chapter 13, causing a deficiency on Property #1. About 5 months into the Chapter 13, I decided to surrender Property #2 and keep Property #1. This caused some additional arrears. They were to be paid off in the chapter 13.

Then, I converted to Chapter 7. I did not reaffirm, but also was in arrears at the time. I was asking the bank for something -- I think an installment to catchup -- and they asked if I wanted a modification. They sent the paperwork and I sent it back during the pendency of my Chapter 7 discharge. They approved the modification with absolutely NO trial payments of any sort. Done.

In the end, I was ready and willing to walk away from the property. If you are willing to walk away and to lose it... you can take the chance with the modification strategy. If you can't take the chance, you need to come current.

In any event, you must look at the financial viability of the property, and whether you are upside down. Second mortgages can make this more difficult as well, since the second would need to subordinate to the first "modification" (since this is a recorded document and lien position matters).