Starting initial consultations w/ attorneys this week...

[veloguy]

I met w/ first attorney yesterday with the intention of looking at CH.7 to wipe out about $87K worth of unsecured debt while still being able to hold onto my house (family of 4). Attorney actually suggested that I look at walking away and foreclosing on the house instead.

I'm currently in a circus loan w/ Countrywide (1st only, no second. Upside down about $60K) that is set to recast in 2/08 and min. payment will jump from $1900 to $3000 which will far exceed my monthly income with other expenses. Attorney recommended waiting for a month or two while still staying current on CC's and mortgage, in addition to bugging the crap out of Countrywide to see if they're willing to renegotiate the loan. If they won't negotiate, he said I should just stop paying for a couple months to get their attention, then see if they'll negotiate. If no, he said we'd then file Ch. 13 and get a broker to do a short sale. If they won't agree to short sale, then I just move out and let them foreclose.

I thought this was an interesting strategy and I left w/o asking all the questions I should have so I was hoping I might get some sage insight here...

If I stop paying mortgage several months prior to filing Ch. 13 do I run the risk of having collections folks calling work, family, etc.?

Reading here, it sounds like going into Ch. 13 behind on mortgage makes in impossible to get the Mort. Co. to agree to short sale. True? Is that bad advice?

What happens to my unsecured CC debt once in 13? Do I go on a payment plan with those? Attorney spoke about the posibility of using 13 as leverage with Mort. Co. to get them to agree to short sale, then once the house is sold, w/ my income I could just come back out of 13, but what about the unsecured debt at that point?

Just wondering if I completely mis-understood the conversation, or if this attorney was nuts, or maybe both. Any input would be appreciated. Thanks in advance. *so confused w/ all this*

[CindyLou]

Hmmmm...What about the chp 7? What did he say about that?

[SinkingFast]

Our personal experience with CW was not good in trying to get them to work with you. We did the paperwork for Short Sale. We tried to offer a DIL. At 4 months past due, CW began Foreclosure proceedings.

There may be merit to that attny's advise. You might need to seriously consider letting the house go. I know it's your "home" and it's hard to see the forest for the trees. But in reality, many of us got into financial distress because we listened to the Lenders and borrowed way more money for a house than we could realistically afford to pay.

Life's little ups and downs come and you can't make ends meet and keep the mortgage current. So you rely on Credit to make it thru. And then the folks that took teaser rates to get qualified never looking 2, 3, 5 years down the road when their payments would balloon.

You've really gotta step back and take an objective look at the house situation. Do you own it, or does it own you??

Compare what you're paying in mortgage payments, insurance, taxes, repairs, upkeep, and such to how much it would cost you to rent. For us,............ Renting is MUCH cheaper.

Pull the emotions out of the equation and look at the cold harsh reality of the numbers.

[veloguy]

Didn't get the impression that he felt

Hmmmm...What about the chp 7? What did he say about that?

Ch. 7 was an option b/c I'm over a little bit over the median monthly income. Of course, it was intitial consultation so I didn't have percise numbers w/ regards to expenses, etc.

[veloguy]

Yeah, I'm quickly coming to accept that we're going to have to walk away from the house.

Did you file soon after you stopped paying mortgage? Or did you let it go for the 4 months or longer? My other concern is that I don't want to deal w/ mortgage company calling my employer, neighbors, family, etc... But I'll need 1-2 months mortgage money to pay the retainer for the attorney so that I can file 13. How soon after you stop paying to they start to try and hunt you down?

[CindyLou]

Well, if you are only a littel over the median then your attorney is likely planning on trying to keep you in the house with a 13 and then probably paying your unsecured creditors like 0 or 1% or something small like that. How long have you been in the house? I wonder if you have been in long enough to do a cram down? How long is that? Is it 910 days? Can someone chime in on that? If you've been in long enough then you will only owe what its worth not what you owe, then you only pay your unsecureds a few cents on the dime and there you do. A nice manageable chpt. 13 and you still have your house. Now of course I'm just wild guessing here from the little info you gave us. I would suggest you see a few more attorneys. If you are just a little over the mean maybe there is a way for you to adjust your income....cut back on overtime or hours a few months or something and wait a few months so that you an qualify for 7 and then just truly WALK away and be done!! See a few more attorneys and get more answers. But at least you got a good start. Good luck and keep us posted!!!!!!