I know I ask a lot of questions...

[TRfromillino]

but being off on the weekend gives me way to much time to think and imagine all the worst things that could happen and the lawyer has the weekend off also, so here I am..lol

My chapter 7 bankruptcy will most likely be filed this week. I live in a small town, and my loan was local, not one of the 'big guys'. I have chosen not to reaffirm my mortgage and feel that it's quite possible for them to come after me right away. If they can't get the ipso facto enforced, (which I doubt) they will most certainly attend the 341 meeting. Right now my intention is to keep paying my payment as usual. But once the stay is lifted upon discharge, they can begin to contact me again or possibly start foreclosure even tho I am/will be current. Being in a small town, I think the window of time towards foreclosure is much shorter because there just aren't that many around here. They may choose to 'work with me' because they really aren't real estate agents. They don't want a house on the books if someone is keeping the payments made. That's what I tell myself. I would like to hang onto it for 3 more years until the balloon is up. But there is a chance that it might not play out that way.

My questions are:
after the bankruptcy is over and closed, is there a reason I couldn't put this house on the market in a traditional sense, pay off the bank, and keep whatever is extra? Or would they force it into a short sale?

Do I have to inform the bank of my intentions to sell?

I believe that selling the house in a traditional sense will give me more $$ to start elsewhere than by not paying them and banking that money. I just don't know what is and isn't allowed. I'm trying to prepare myself for different scenarios in case something unexpected happens.

[tobee43]

i don't know if you live in a judicial or non-judicial state, based on which is how fast the bank can move. all mortgages, actually most any contract will have ipso facto clauses. they are usually not exercised at that point, as well as your filing will stop any action from the lender.

IF you include your mortgage in the petition and your bankruptcy is discharged and closed....(at least i would wait until it's closed), you can sell you home provided the amount covers any and all liens and pays off the bank in full. if anything is actually left, it would be yours. that is, as long as they haven't already foreclosed and changed the deed, which even in a non-judicial state you would get properly notified.

you don't have the tell the bank anything as long as the house is still in your name. just to let you know, we have vacated our home over 5 years ago and since the bank will not foreclose, we can put the house up on the market if we want, however we know that property is not only underwater financially, but literally as well we would sell it and be done with it IF we could however in our case it's simply not possible to sell it to pay off the bank.

oh! and ask away! there are many out here to help you

[Drazil65]

We had our house listed for a traditional sale right after we were discharged and closed. Its still in your name so you can sell it if you want to. We ended doing a short sale in the end but that had more to do with the house being over appraised anyway. The bank was very happy that we went through the trouble (showings, open houses etc) of doing it after our obligation was discharged, it saved them alot of time and trouble doing it later. That is the reason they agreed to the short sale in the end becasue they knew it was that or foreclosure as we had stopped making payments right after we filed chapter 7. Good Luck!

[justbroke]

Under State non-bankruptcy laws, the lender should not be able to foreclose unless you are not paying (the debt or taxes) or not keeping up with hazard insurance. A lender can not just foreclose because you filed bankruptcy. State law controls how a bankruptcy works. I would not worry about any ipso-facto clause as they have no affect in this situation.

You are correct that this small local bank will probably attend the 341 Meeting. They may force you to redeem, reaffirm or surrender your property, which are the only "real" bankruptcy choices. I would not speculate about what they "might" be willing to do. The bankruptcy allows you to handle this based on the law, not what the CU feels. If they push for redemption, reaffirmation, or surrender, you would have to chose one. Unless you are sitting on a bunch of equity, I don't see reaffirmation as a solid choice.

What is your real strategy? If you're trying to "bank" on accruing more equity over the next few years, I would say that's not the best plan. You can't estimate what the market could do in that time. I would definitely speak with several attorneys on your strategy and what they can do to help you.

How much equity do you have now?

[TRfromillino]

This is a judicial state. Whatever that means..lol Actually I wouldn't have to talk to the bank if I decided to sell because, as I said, this is a small community and they'd know immediately. As in 'the bank presidents wife used to babysit the kids when they were little' small.

[tobee43]

This is a judicial state. Whatever that means..lol Actually I wouldn't have to talk to the bank if I decided to sell because, as I said, this is a small community and they'd know immediately. As in 'the bank presidents wife used to babysit the kids when they were little' small.

well you know those stories you hear about so and so stayed in their home for 4 years and the bank still hasn't foreclosed....that's a judicial state...meaning the process must be through the court system. many district court judges are not scrutinizing many of these foreclosures due to all the problem in relation to robo signing etc. i mean, really, even in the OLD days a judicial state it could take up to 2 years to get one out of their home, and if you chose to go to court and i knew someone that did this and stayed for years. she would go up in front of the judge the judge said lender work with her she would try and fail and the process repeated itself for literary years. NOT that this is always what happens, however again in a judicial state it must go through the courts and that takes much more time than those states that are non-judicial and don't have to endure that process.

we also came from one of those tiny communities and even tho we had our mortgage with chase it was a tiny chase we all grocery shopped together and went to the same dentist since there was only one in the area LOL!

like jb asks, what is your strategy? do you want to keep this home??? if so, maybe the bank will work with you. i know for us, we had to made the hard decision that we were leaving period, but we didn't stay and NOT pay...we left as soon as we rec'd the first NOD from chase which by the way was right in the middle of our loan modification. which we hadn't paid our mortgage in approx 6 months since chase FORCED us to stop payments to qualify for the loan mod. what an oxymoron move on their part.

[keepsmiling]

The equity is a HUGE part of this whole equation. Where do you stand with that?
It would be so helpful if the powers that be could fix the profile with the state appearing on the side
<<<<<<<<<<<
... without knowing the state and your exemptions, it is hard to advise

[justbroke]

I asked about the equity as well. If you can't protect the equity in the bankruptcy, there are issues other than the specific issue of the lender demanding that the debtor either redeem, reaffirm, or surrender.

[keepsmiling]

exactly

[keepsmiling]

I'm guessing Illinois from the avatar?

[LadyInTheRed]

The equity is a HUGE part of this whole equation. Where do you stand with that?
It would be so helpful if the powers that be could fix the profile with the state appearing on the side
<<<<<<<<<<<
... without knowing the state and your exemptions, it is hard to advise

Yes, that would be helpful. But, if somebody provided the information in their profile, you can see what state they are in by clicking on their user name, clicking "view profile" and then clicking the "about me tab". The OP is in Illinois.

[TRfromillino]

Yes, I am from Illinois. The equity (difference between mortgage and county assessed value) is a shade over 12k. The homestead exemption in Illinois is 15K. So I'm ok there as far as protecting it.

My plan? Well I have a couple different ideas. One I would like to keep paying the mortgage to bring down the total and add to the equity until such a time comes that it's impossible to do anymore. I'm 60 years old....anything can happen. At that time I'd put it on the market and start looking for something.

However if the bank does come to the meeting and demand I reaffirm, surrender or redeem, and do not want to consider my idea of continue to pay and stay, I would begin to put it on the market immediately. I just feel that they will not give me a whole lot of time to 'save anything' before they began foreclosure. At which time I would also stop paying.

[keepsmiling]

Do you feel that the county assessed value is what you would actually get at sale?
Can you rent for less than your current payment?

[TRfromillino]

I have no idea of what the house could bring. I would like to think it would bring more, considering the updates I've made since I moved in. But it's what the market will bear. In general, reasonably priced houses do not last long if they are in good condition. And i'd say if I rented it would be for about the same money for less than what's here.

[keepsmiling]

Be a little careful of what you wish for right now
Could be, if you are close on equity.... the tt might make things difficult for you. Someone recently reported (Worriedmom) that she was forced to buy back some alleged overage of equity.
See what the attorney has to say and let us know. He/she hopefully will also have some kind of a feel for how your lender may proceed. Also.... just for your own sake... see what Zillow says your house is worth. Some tt's are using it even tho we all know it's often way off. And don't be shocked if you need to get a CMA.