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making no mortgage payments and filing bk?

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    #1

    making no mortgage payments and filing bk?

    For those of you going through a foreclosure and filing/filed chap 7..living in your home free of charge during foreclosure..


    I raised the question to our attorney that if we're not making mortgage payments (going through forecolosure) how are we going to be able to list a housing payment on our expenses..we will definitely be having a payment through a rental soon but not now. I am concerned because if we stay for several months and save money how is us having cash on hand going to look to the trustee (money needs saved to move and get into a rental). He explained that everyone has to have a place to live and we are allowed to list what our average monthly payment would be for our area. I don't know if we should secure a rental now or what?
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    #2
    Your lawyer said that everyone has to have a place to live and you are allowed to list your average monthly payment for the area.....follow his advice.

    He's not saying that you need to secure anything, he's saying that they'll list the average monthly payment for rentals in your area.

    All you need to do is feel out the rental market in your area so you'll know the ballpark on your future monthly rental rate. Rental rates don't generally undergo drastic changes overnight, so whatever prices you find now are going to be about the same prices you'll pay down the road when you're actually ready to move.

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      #3
      In cases where my clients surrender the residence I list an estimated rent payment on Schedule J. I further indicate that "rent is estimated" on line 19 which asks you to describe any increases or decreases reasonable anticipated to occur within the following 1 year. I have never had a problem with a Trustee using this approach.

      Des

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        #4
        I became concerned because I have been talking with someone that has a friend in my district that used this approach and it was dismissed because the Trustee didn't allow it. :/ My attorney did tell me that I needed to let him know which I was going to use..rental estimate or our mortgage payment (we haven't made a payment in 9 months as we've been going through the modification process. The lender accepted and we're now waiting on paperwork to let us know the new terms and payment they've come up with..we'll see if it will work for us).

        Thank you for your replies, I appreciate it.

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          #5
          My attorney told me that b/c we are actually in foreclosure and could possibly get caught up if wanted we could list our mortgage payment. I'm in FL also. He did put on our paperwork that "Other" when it came to the question if we were surrendering the house. He put other - intent to stay with modification approval.

          I was discharged in Oct and have not heard a word from out mortgage company.
          "I DECLARE BANKRUPTCY!" Ch 7 Filed 7/15/11 * 3 Minute 341 8/19/11 * Discharged 10/20/11

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            #6
            Yah, we're doing the modification first and getting that instone before doing the BK. I've read that if you file BK while in the middle of a Mod, it can stop the Mod (because of the stay and such) and you'd have to start all over.

            Have you contact them since you're discharged?

            Comment

              #7
              Originally posted by goturtlego View Post
              Yah, we're doing the modification first and getting that instone before doing the BK. I've read that if you file BK while in the middle of a Mod, it can stop the Mod (because of the stay and such) and you'd have to start all over.

              Have you contact them since you're discharged?
              You better believe it stops the modification. It also discharges the debt so you have nothing to modify.
              Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

              Comment

                #8
                Originally posted by OhioFiler View Post
                You better believe it stops the modification. It also discharges the debt so you have nothing to modify.


                From what I've read and researched I could modify my mortgage (if I still wanted to) even though I did not reaffirm it and I could not be liable for it if I decided to walk away.
                "I DECLARE BANKRUPTCY!" Ch 7 Filed 7/15/11 * 3 Minute 341 8/19/11 * Discharged 10/20/11

                Comment

                  #9
                  Originally posted by goturtlego View Post
                  Yah, we're doing the modification first and getting that instone before doing the BK. I've read that if you file BK while in the middle of a Mod, it can stop the Mod (because of the stay and such) and you'd have to start all over.

                  Have you contact them since you're discharged?


                  I received the first mod denial right before discharge date. I have not called them and they have not called me. I received one letter stating so and so was handling my account if I had any questions to call so and so but I did not call b/c I don't have any questions...lol
                  "I DECLARE BANKRUPTCY!" Ch 7 Filed 7/15/11 * 3 Minute 341 8/19/11 * Discharged 10/20/11

                  Comment

                    #10
                    Ohio,

                    Just to be clear - yes you are correct that if a borrower modifies their mortgage before BK discharge, the loan is still discharged (if not reaffirmed of course), but that does NOT mean that the borrower will have to go back to "pre-modified" payments in order to stay in the home (if desired). They would just keep making the modified payment amounts and will be fine. Also, as another here said, it IS possible to get a modification even AFTER discharge. I have done just that....was discharged in BK, not reaffirmed, and then continued to work with the bank, was offered a good modification which removed all legal fees, late payments etc...lowered my interest rate, and extended my loan maturity date to cover interest payments due and escrow shortages that occurred during the time I was not making payments.

                    Now, the benefit for me is that if for some reason in the future I decide I cannot (or do not desire to) make payments, the only recourse for the bank is foreclosure.

                    ETA - Oh, and yes the other poster is correct that if you are in the PROCESS of getting a modification and then file BK, the PROCESS gets put on hold until the BK is completed. Officially you arent starting over, but realistically you are because they will just ask you for everything all over again....actually they do that over and over anyway! ARGH...

                    Glad Im done with all that....

                    Comment

                      #11
                      Do you get revised loan documents with the modified mortgage? I would hope one has those documents reviewed by an attorney. What is to keep the mortgage provider from creating a new mortgage including new debt?

                      The only recourse the lender ever has is foreclosure until after the property is foreclosed.
                      Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

                      Comment

                        #12
                        Ohio,

                        There are many other threads about this - the difference is the loan is being MODIFIED, not refinanced into a new loan...I have the same account number etc...and my "statements" still have language that says "if this debt was discharged in BK this is not an attempt to collect a debt blah blah..... But, my loan balance is still reduced every month just as always and I rec'd a statement with taxes paid in 2011 etc.. Unfortunately one of the drawbacks of this is that since the debt is discharged, I dont get any positive credit reporting for my payments every month....but its still a small price to pay for getting to stay in home I wanted to keep (mine wasnt that much upside down), and have no liability for anything if something changes in the future.

                        Again, lots of other threads about this....and remember, a REFINANCE is different...that IS an entirely new loan with all the associated liabilities.

                        Also, Ohio, foreclosure is NOT the only action available if you stop paying in many states....of course as a discharged debt you are correct, but if one reaffirms, or those who dont file bk and are foreclosed upon, in many states they can be held liable for any defiency.

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                          #13
                          Sh9730. Wow that's a great mod you got! I'm currently waiting for the paperwork to tell me what they're offering with our mod. Here's hoping.

                          Comment

                            #14
                            Originally posted by sh9730 View Post
                            Also, Ohio, foreclosure is NOT the only action available if you stop paying in many states....of course as a discharged debt you are correct, but if one reaffirms, or those who dont file bk and are foreclosed upon, in many states they can be held liable for any defiency.
                            You misread my post. I indicated the only recourse a creditor has BEFORE foreclosure is foreclosure. A deficiency action would follow a post-foreclosure sale.
                            Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

                            Comment

                              #15
                              Originally posted by Freddy03 View Post
                              My attorney told me that b/c we are actually in foreclosure and could possibly get caught up if wanted we could list our mortgage payment. I'm in FL also. He did put on our paperwork that "Other" when it came to the question if we were surrendering the house. He put other - intent to stay with modification approval.

                              I was discharged in Oct and have not heard a word from out mortgage company.

                              I meant b/c we aren't in foreclosure yet.
                              "I DECLARE BANKRUPTCY!" Ch 7 Filed 7/15/11 * 3 Minute 341 8/19/11 * Discharged 10/20/11

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