Worried About It All

[Greg]

Hi,
We are in CA, hope you can assist me with some factual answers
As of our 341 Meeting date last week we were already down 90 days late on our Mortgage

1) Which one will come first BK (7) discharge or Foreclosure?

2) We were advised even by HUD to stay in the house until we are forced to vacate or evicted (cash for keys) or until we are able to sort out getting caught up with our payments. We both lost our jobs and who knows...we might find something here soon that can still save our home. The home is currently listed as shortsale. We intend to save the house if we could, if not then it will foreclose. My concern is that will it be so difficult to find a rental home after Foreclosure or a discharged BK? I am so worried about my kids and of course being homeless

3) Lawyers.com says it is a fact that after BK is filed that any income you earn (in our case, if we found jobs) we get to keep. Well, if we found jobs and they were enough to pay our mortgage definitely we will try to reaffirm our mortgage and cars. But what if we found jobs that are small hourly temp jobs that are just sufficient to pay food and some utilities, do we still need to disclose such income to our attorney?

4) Our 341 meeting went ok but because discharge is still 2 months away I am still worried (fear of the unknown). How often do these petitions get rejected or do they even get rejected? If so what would be the instances?

5) Our homeowners insurance is due in March 2008, we need to find money somehow to pay that right? Our 1st half taxes were due in October 2007 and coming due on April 2008- we have no funds to pay our taxes either. Will our house go into auction right away?

6) Lastly i've been seeing "PACER" on some of the threads, what is that? And also what is Chapter 7 - Asset (Is there any other kind?)

Thank you so much for any insights to my questions
Greg

[FreshLikeADaisy]

Hi,
We are in CA, hope you can assist me with some factual answers
As of our 341 Meeting date last week we were already down 90 days late on our Mortgage

1) Which one will come first BK (7) discharge or Foreclosure?

Depends on state law (the actual foreclosure process) and the lender (at what point the lender's policy initiates acceleration of the loan) so that's hard to say. You could call the lender and ask, but if you're already in Chapter 7 they will not start foreclosure until/unless they move for and receive a lift of the automatic stay from the bankruptcy court. You will receive notice of this from the court if/when it happens.

I'm not in CA, so I can't get any closer than that. Maybe someone with experience in CA can tell you what they went through as far as timeline. I'm kind of surprised HUD wasn't able to give you a better idea of timeline in your area, if you spoke with them locally.

2) We were advised even by HUD to stay in the house until we are forced to vacate or evicted (cash for keys) or until we are able to sort out getting caught up with our payments. We both lost our jobs and who knows...we might find something here soon that can still save our home. The home is currently listed as shortsale. We intend to save the house if we could, if not then it will foreclose. My concern is that will it be so difficult to find a rental home after Foreclosure or a discharged BK? I am so worried about my kids and of course being homeless.

HUD gave you good advice. If you are behind in your payments on secured property in a Chapter 7, you are generally not able to keep the property. What you want to do is save that money to make other arrangements. If you are lucky enough to get a cash for keys offer, take that money for deposit/rent on a new place. You can generally rent from mom and pop, family landlords without problems even after bk, just be honest with them about your situation. The bad property market actually helps you somewhat when you're a renter, because there are properties standing vacant and landlords trying to save their properties with rental income. So try not to worry about that too much right now, just get your cash together and prepare for moving.

3) Lawyers.com says it is a fact that after BK is filed that any income you earn (in our case, if we found jobs) we get to keep. Well, if we found jobs and they were enough to pay our mortgage definitely we will try to reaffirm our mortgage and cars. But what if we found jobs that are small hourly temp jobs that are just sufficient to pay food and some utilities, do we still need to disclose such income to our attorney?

Since Chapter 7 is a "snapshot" of your income on the day you file and six months prior to that, I don't see why you would need to declare any of it. Your lawyer may tell you otherwise, that's just my opinion. Unfortunately, as I mentioned before, in a Chapter 7 if you are behind on payments the lender will not allow a reaffirmation. You would very likely have to bring everything current PRIOR to being able to reaff, or surrender it to the lender if you can't.

4) Our 341 meeting went ok but because discharge is still 2 months away I am still worried (fear of the unknown). How often do these petitions get rejected or do they even get rejected? If so what would be the instances?

That's a HUGE question, dude.

My *opinion* (and it is only that) is that GENERALLY, if you were going to have a specific problem, you would have heard it by now or had some idea of what would be problematic. If your 341 went well and you have received no further notices from the court, you should be fine... but do expect your mortgage lender to move for a lift of stay so they can begin foreclosure. I don't see how that can be avoided, unless you had the ability to bring your payments current very quickly. Also, you can still receive creditor objections to your discharge until the 60 days are up. But you seem to have avoided a random audit or any question of fraud, so hope for the best.

5) Our homeowners insurance is due in March 2008, we need to find money somehow to pay that right? Our 1st half taxes were due in October 2007 and coming due on April 2008- we have no funds to pay our taxes either. Will our house go into auction right away?

If you know you are probably not going to be able to avoid foreclosure, then in my opinion property taxes are not your biggest worry, since unpaid property taxes become the problem of the lender at foreclosure. Concentrate on having a place to live, and preparing yourself and your family for moving.

6) Lastly i've been seeing "PACER" on some of the threads, what is that? And also what is Chapter 7 - Asset (Is there any other kind?)

There's Chapter 7 asset, and no-asset, that's it as far as Chapter 7 goes. Asset means that you have non-exempt property that can be surrendered to the trustee and sold to pay your creditors.

Please see this post for PACER info:

http://www.bkforum.com/showthread.php?t=1011

You could also look through the Bankruptcy FAQ area:

http://www.bkforum.com/forumdisplay.php?f=8

Good luck!!!

[FreshLikeADaisy]

P.S. Do you have an attorney? I'm kind of surprised that he or she has not already answered a great deal of this for you, especially when it comes to having all your payments current if you want to reaffirm the loan, and the situation with your imminent foreclosure. If you do not have an attorney, please know that many bk attorneys give free consults and you would do well to go for a few just to get these questions more specifically answered for your particular situation. I did the best I could, but still... I'm no attorney. Good luck!!!

[Greg]

VERY HELPFUL FRESH LIKE A DAISY, I'M IMPRESSED, thanks so much. Hope someone from CA also gives their $.02.