Montana Foreclosure and Bankruptcy Laws

[ConnieJ]

I have a question I am hoping to get some help with .... I have a home that is in the process of foreclosure with a sell date in Jan, 2013. I have attempted to contact my mort company who insists they can only help me if I reinstate the loan providing them with an amount over 15,000.00 which of course I cannot do.

My questions are :
1. Does filing a BK supercede the Foreclosure proceedings?
2. Is it best to affirm the loan, in the BK
3. What are the other options if I do not affirm the home loan,but do file BK.
4. Any other suggestions of where I might find some assistance.

Thank you in advance for your help ... not a fun place to be in.

[justbroke]

1. Does filing a BK supercede the Foreclosure proceedings?

It will "delay" but may not stop a foreclosure. Only a Chapter 13 can really stop a foreclosure.

2. Is it best to affirm the loan, in the BK

Absolutely NOT! I can't think of ONE reason to reaffirm a mortgage in a bankruptcy! It does nothing for you but bind you into the agreement for at least 8 more years. What if your income changes or circumstances change later? You'd be tied to an underwater home!

3. What are the other options if I do not affirm the home loan,but do file BK.

If you file a Chapter 7, you have no option but to realize that you are likely to lose your home. What you may be able to do, if you file a Chapter 7, is to actually negotiate a modification of your loan! It's not guaranteed, but you may be able to get a principal reduction, interest rate deduction and/or your arrears (missed payments) forgiven or rolled back into the loan and re-amortized!

You should consult with several attorneys so that you can look at the various recommendations for you area. It is never a good idea to reaffirm. How much is the home worth and how much do you owe? If the difference it 10% or more underwater, it's probably not a good idea to even stay in the home (with some caveats being that the "true cost" of living in and maintaining the home is less than rentals).

Your first thing should be to remove the "personal" attachment to the home. Then you can make a smart business decision.

[btbeme]

First - Montana has a generous Homestead exemption. Make sure sure sure that you file one before you file for BK. At this point in the economy, I cannot imagine that whatever equity you have in the home would not be exempted.

Second - reaffirm NOTHINg. While a Ch 7 will stop a foreclosure in its tracks, the bank will either ask for (and receive) relief from the automatic stay, or they will proceed with the Trustee sale about ten minutes after you receive your Ch 7 discharge.

Third - if you plan to stay in the house, you should plan to pay for the house. If you are behind, see if you can adjust your payments to get current. Or, as part of the BK or shortly thereafter, apple for a loan modification that would "get" you current. In any case, you MUST be able to show that you can afford the payments they offer, or else your loan modification will go nowhere and you house will be foreclosed.

Per the above advice, a good BK atty is an important first step. I dare say that if you feel that you cannot afford one, then you cannot afford the house. SO get thee to an attorney for a few free consultations and see where you stand. ANd if the house is underwater, walk. Unless you are in a few select markets, Montana's housing values have been flat for decades.