The time has come... ready to start the BK process -- need advice

[SweetGeorgia]

Just chiming in with encouragement, tacco! What you did with the new bank account is VERY smart (I'm paranoid too, but only because they were really out to get me!). Getting the new cheap but reliable car was also very smart.

You might be onto something with the idea of not paying the mortgage, then strategically using the bankruptcy to buy time before foreclosure. Every month that you can stay there for free is a month you've doubled your income. Every day rent free is $40 in your case!

[tacco]

Thank you again for all the advice and encouragement. Yes, I totally realized that if I was planning to let the house go too, that I should stop paying on the mortgage right away. I managed to cancel this month's auto-pay of the mortgage. So my plan is to wait until the notice of sheriff's sale (maybe 4-5 mos?) and then file for CH7 to get the additional time. And then I'll get 6 mos after the sheriff's sale.

I did the free consult with the BK attorney and they agreed that it seemed like a sound plan and they estimated I might go as long as 13-15 mos without paying the mortgage until I had to leave. I liked them a lot (I had thought that this was the one I was going to go w/ anyway,) and the fee was $500 less than I expected it would be, so I went ahead and put down a retainer.

So here are my new questions. I'm a bit worried about the possibility of one of the credit cards suing me and having to file BK earlier than the 4-5 mos I was hoping for. How likely is that?

The attorney said that as soon as cc companies start calling, I can refer them to the lawyer (even though I won't have filed yet.) That is a very appealing option, but I'm worried that will make the cc companies escalate to suing me quicker. I was thinking that maybe I should talk to them for the first month or two telling them that I'm trying to work something out? Would that help? Also, I even thought of going ahead and paying the minimum payments (total of $1,000) at the 3 month mark to "re-set the clock." Any feedback on these ideas?

Also, about the mortgate, attorney recommended NOT telling them that I was going to file BK. Should I try to buy time by trying to apply for a HAMP again? Or by making a payment at the 3 month mark?

The other question that came up is that, on paper (property tax statement of market value,) my house looks like it's worth a lot more than the $103,000 I owe. Their concern was that the trustee might see that and say that the house should be sold. They said that I should get a realtor to give me a market appraisal of the house and get an estimate on how much s/he thinks it would sell for without any repairs having been made. I guess the attorney will use that info to determine whether to take the state or federal exemption.

I was exhausted after that whirlwind day of making the decisions on how to proceed and meeting with the attorney. But now I feel this sense of peace, like I can actually relax this weekend because there's nothing I have to be worrying about! And I'm euphoric that, with the money I'll not be paying on mortgage and credit cards, I'll be able to buy my children the new glasses they need, and my daughter the braces she needs, and maybe even the eardrum repair surgery my son needs (I have insurance, but haven't been able to afford this because the deductible is high.) I can turn up the heat in the house instead of keeping it low and being cold because it costs too much! I can look at my daughter's sneakers with the holes in them and not freak out because I now know I can afford to buy her a new pair! I cannot tell you how incredibly relieved I feel!!!!

Thank you again for this forum!

[JessMN]

Congrats tacco - I remember that sense of relief at actually doing something about my situation. I recently started a thread about the emotions of bk here...it may be helpful to see you are not alone in your stress!

[btbeme]

DOn't tell anyone anything. Don't tell creditors that you intend to file BK. Give them that info once you have filed.

And don't pay any creditors anything. Believe it or not, payments to creditors can cause problems with your filing, especially if you have to file sooner than planned.

[jacko]

Are you referring to North Minneapolis?

Not in Minneapolis unless you want to live North and you really don't. The streets are littered with for sale signs. I'd stay in your house as long as you can because for 1200 and 2 kids you can't hardly rent cheaper than that.

[mountanddo]

Are you referring to North Minneapolis?

Well, I said Minneapolis and North so yes I am, LOL

[jacko]

When I gave my mpls condo back to Wells Fargo, the foreclosure process lasted 18 months in my case. I bought my condo for $161,000. When it was put back on the market, sold for $53,000.

[QUOTE=tacco;560045]Thank you again for all the advice and encouragement. Yes, I totally realized that if I was planning to let the house go too, that I should stop paying on the mortgage right away. I managed to cancel this month's auto-pay of the mortgage. So my plan is to wait until the notice of sheriff's sale (maybe 4-5 mos?) and then file for CH7 to get the additional time. And then I'll get 6 mos after the sheriff's sale.