Whats better to do? I'm totally new to this...

[ltrain823]

Hello everyone...I hope all is well! I'm going through probably one of the toughest crisis I've ever had to deal with in my life. Long story short, I'm getting ready to file BK soon and everything seemed to be going well. I just bought a brand new condo a year ago and my parents asked if it would be ok to live with me for however long it takes...my plan was to get a small apartment but since my parents said to just get a house and we would split the mortgage it would be best. My intentions were to have the house when I got married next year...well...my parents are now about to file for a divorce and my fiance just left me because she thinks I have a disfuntional family and she wasnt too crazy about marrying a guy at the age of 25 already filing BK!!! Pretty messed up huh? On top of all that, my mom might be going to jail because of money laundering!!! I told you it was bad...

So now I'm stuck with a $2,000 mortgage that I was splitting with my parents for the whole year and barely making it with that...the plan was when I got married that we would have 2 solid incomes coming in and we would be perfect.

My question here is...do I include the home in my BK or just let it go into foreclosure? Or is that even a possibility? My atty already told me that I would not have to include it in my BK since I have little to no equity. Can someone please give me some advise as how to move forward with this? It's so hard to focus on anything right now! Thanks for reading and God bless!

[MomIcantFindmy]

I guess if you do not want the house I would let it foreclose however, I would include it in a BK so if there ends up being a remaining balance on the forclosure you don't get stuck with it.

[cleo1357]

It sounds like you are unable to pay the mortgage on your own, so why would you reaffirm? You can't count on roommates, or another gal coming along. If you are unable to pay the monthly mortgage payment on your own, you should let the house go in the BK. Otherwise, you wil probably wind up with a BK and a foreclosure or at the very least late pays after BK. Lenders do not look kindly on bad credit after BK. Good luck!

[yak411]

This thread may help out-related to your situation

http://www.bkforum.com/showthread.php?t=23859

[JRScott]

Based on what you've provided, I"d say surrendering the home in the bankruptcy is the best bet. It is a single hit on your credit rather than a double whammy of a foreclosure and bankruptcy.

Sorry to hear life's not going so good, hope it looks up. You should talk to 3-4 bk attorneys in your area and see what they say.

[creditwrench]

Did you think about this?

So now I'm stuck with a $2,000 mortgage that I was splitting with my parents for the whole year and barely making it with that...the plan was when I got married that we would have 2 solid incomes coming in and we would be perfect.

My question here is...do I include the home in my BK or just let it go into foreclosure?

I think there may be some aspects you haven't even thought about or realize existed.

First of all, It makes no difference how much equity you have or don't have in the property, you are legally responsible for the entire amount even if you have co-signers for the note. Each and every one of any co-owners or co-signers to the note are individually as well as severally responsible for the entire balance. If you have any such thing as co-signers or co-signers they can still be held responsible for the note even if you file bK.

There are other things to consider even if you do file BK. Have you sent the lender a RESPA demand letter yet? If not, why not?

Have they started foreclosure? If not, and you can't keep up with the payments then letting it go into foreclosure and not filing BK will be a lot less expensive than going into BK.

What chance you have to fight the foreclosure and win in court largely depends on what type of foreclosure would be and that depends on your state laws and the terms of your note and mortgage. If you live in a non-judicial foreclosure state then you are much worse off than if you live in a judicial foreclosure state.

In judicial foreclosure states or states where lenders do not use the non-judicial options even though they exist you can use other laws to help put a stop to the foreclosure process. In most states they have a very limited time within which they must file for a deficiency judgment on the deficiency balance after the property is sold. Lenders seldom go after the homeowner for the deficiency balance even if they have that option.

So you either plan to file BK or are thinking about filing BK because of the foreclosure which you could easily prevent or completely defeat and most likely would not lose anything except the hit on your credit reports even if you lost the home and didn't do a thing to keep it from happening? Why?

What about your rights under the law? Laws such as HOEPA, RESPA, FDCPA, FCRA and others? Don't you care about those? Do they mean nothing to you?

Here we are celebrating Memorial Day 2008 which is the day of national mourning and respect for the dead among which are many hundreds of thousands if not millions who have died fighting to preserve and protect those rights we all have under the law and millions of living Americans don't stop to think about what those brave Americans fought and died for?

What you face in filing bankruptcy is far worse than what you face in letting it go to foreclosure no matter what happens in foreclosure. Don't let foreclosure scare you into filing a useless bk.

Even if you don't want the home you would do better with doing a deed-in-lieu of foreclosure than you will do under Bankruptcy.

The rap on your credit report will age out and make little difference after a couple of years or so but a BK will stay on your public record at the courthouse for the rest of your life and far beyond that. So you tell me which is worse?

If you vigorously defend your rights under HOEPA, RESPA, FDCPA then you might very well be able to stop the foreclosure entirely and even force them to give you a better deal at a reduced interest rate.

I know of many people all across the U.S. who have done that and have been living in their homes for as much as 10 to 15 years or more after they were foreclosed on and the property sold at sheriff's auction. Anybody can do it. It isn't rocket science or any kind of patriot nut job mumbo jumbo. All you have to do is learn how to use the law to work for you instead of running for the nearest Bankruptcy nursery lawyer.

[HHM]

What about your rights under the law? Laws such as HOEPA, RESPA, FDCPA, FCRA and others? Don't you care about those? Do they mean nothing to you?

Yeah, but it is a pretty big assumption that this person even has any defenses under those laws. Certainly, the OP can raise the issues to stall, but that only delays the inevitable, unless there really is a defense.

First, HOEPA is part of Truth in Lending. The right of rescission (i.e. the ability to rescind the lending agreement as if it never happened and release the lien) only arises for non-purchase money loans, i.e. Home Equity Loans, Re-Fi's etc. HOEPA and TILA are disclosure requirements, if the lender violates those provisions, the debtor has certain rights and remedies. But, the right of rescission only arises for non-purchase money loans and there is a 3 year statute of limitations from the date the loan originated (but there are some exceptions).

As for FDCPA and FCRA, there is no right or rescission that I am aware of, raising such defenses may only delay the foreclosure, but cannot undue it or stop it. Nor can you necessarily stop the foreclosure, both FDCPA and FCRA only have provisions for statutory damages (i.e. $1,000).

RESPA is a little more difficult to employ since RESPA, on its own, does not give the debtor significant remedies, you use RESPA as a means of pleading a violation of a States UDAP (Unfair & Deceptive Trade Practices Act). Under some state UDAP's, you can rescind the loan.

[2confused]

HHM,
My discharge was yesterday for my chapter 7. I'm thinking of trying to work something out with the 1st mortgage. It is for 504 and house is worth around 470...and then stop paying on 2nd (which is 130) What is the liklihood that the 2nd will come after us for foreclosure and when.
Otherwise,if i don't make a deal with the first (trying to hold out on IO loan for about 6-7 years), how long before we are bootrd/when will we get NOD. We are in California.