Giving up our home!

[concerned]

We are hoping to file a Ch. 7, but we aren't really sure how it will all turn out. I have learned from these boards, that we most likely can stay in our home for some time during this whole process, but are opting to move into an apartment just so that we don't have to worry about being evicted. Our rent payment will be significantly less than our mortgage. Our attorney told us to stop paying the mortgage since we were giving up our home. My question is: what should we do with the extra cash? Our first instinct was to pay down creditors, but I heard on aother thread that this is a no-no; that they will most likely request money paid out back for the trustee to disburse to creditors equally. We plan to let our home go (that is what got is in this mess in the first place), but we have every intention of paying our small credit card debt ($3500) off. If we save the money, will they ask for us to turn it over to them to go to our mortgage. Can we use the money to pay for a car since we will lose our cars in the Ch. 7?

I don't want to do anything we aren't supposed to do. Our attorney hasn't said much to us other than to stop making mortgage payments.

[EdytaHome]

Stop making payments, file BK (if you must), since you're not keeping the cars and house you can exempt a reasonable amount of money in the bank. This money will help you get a new place to live, move, and pay for lawyer fees. After you file BK if you have spare money coming in, it's OK. What you have at time of filing is what the court cares about. Of course, unless you happen to get your hands on a very large sum of cash.
Good luck.

[concerned]

EdytaHome

Thanks for the info. I'm not sure what it means to exempt money. Can you explain this more?

I'm not sure if we will qualify to file Ch. 7 or if we will have to do a 13. We met with our attorney to originally try for a deed in lieu. We are making ALL our payments, but we are strapped and keep end up having to refinance. We got in way over our head and didn't realize we would be so strapped. We even tried to do a partial lein release to sell a portion of our property--no luck. We just really feel like were on a sinking ship and want to get off right away. The attorney thought it would be too late to try for either short sale or deed in lieu prior to the Oct. 17 deadline. If the banks didn't agree for either of these prior to this date, he said, we would be in trouble.

I realize most on this board have too much unsecured debt. Right now (due to refinancing, home equity loans, etc.), we are just the opposite. We used our credit cards here and there prior to meeting with our attorney because we never anticipated filing ch. 7. I must confess, I'm really scared. Are we doing the right thing? We have not used our credit cards at all since we met with him. He never told us not to, but we didn't think we should so we haven't. Are you basically required to explain what you spent your money on and why at a 341 meeting? How far back do they question?

We will take your advice and use the money towards moving. I'm so grateful to have found this board. I would be completely lost without it!

[EdytaHome]

It depends how you file (Chp 7), if you use federal exemptions and you don't have any real property to exempt (houses you want to keep with value), you can use the wild card. This method basically gives you ($20,000 if married) a way to write off (keep) your personal property, cars, money in the bank, and such in this value amount. Please see my previous posts.

You can gain valuable information on this forum, you just have to devote a couple of days to reading.
By the way, how much are you thinking of discharging on the house?

I'm not familiar with Chp 13 but if you have more than $100 left over to spend each month you may be forced to file 13.

Good luck.

[almost_homeless]

Thanks for the info. I'm not sure what it means to exempt money. Can you explain this more?

I'm not sure if we will qualify to file Ch. 7 or if we will have to do a 13. We met with our attorney to originally try for a deed in lieu. We are making ALL our payments, but we are strapped and keep end up having to refinance. We got in way over our head and didn't realize we would be so strapped. We even tried to do a partial lein release to sell a portion of our property--no luck. We just really feel like were on a sinking ship and want to get off right away. The attorney thought it would be too late to try for either short sale or deed in lieu prior to the Oct. 17 deadline. If the banks didn't agree for either of these prior to this date, he said, we would be in trouble.

I realize most on this board have too much unsecured debt. Right now (due to refinancing, home equity loans, etc.), we are just the opposite. We used our credit cards here and there prior to meeting with our attorney because we never anticipated filing ch. 7. I must confess, I'm really scared. Are we doing the right thing? We have not used our credit cards at all since we met with him. He never told us not to, but we didn't think we should so we haven't. Are you basically required to explain what you spent your money on and why at a 341 meeting? How far back do they question?

We will take your advice and use the money towards moving. I'm so grateful to have found this board. I would be completely lost without it!

You can keep the money that you were paying out to the mortage and stow it away. I did, but i didn't put it in the bank, i kept it my safe lock box. I only put in my checking account what i need to pay my bills (utilites ect) and i have almost 10,000 saved up.

I don't know what to tell you about fililing bk, that is a personal choice and each and everyone's situation is different. You really need to discuss it further with your atty.

[Lightning]

You can keep the money that you were paying out to the mortage and stow it away. I did, but i didn't put it in the bank, i kept it my safe lock box. I only put in my checking account what i need to pay my bills (utilites ect) and i have almost 10,000 saved up.

Sounds like textbook fraud.

"almost_homeless" is a pretty ridiculous name given you have ten grand in cash.

[Minnymouth]

LIGHTENING - "lighten up".
Money that is saved from not paying mortgages, credit cards, is not considered fraud..........!!!! You can save a good lump sum during bk if your case last a long time.....
If you were paying out $1500.00 a month on cc and mortgage payments, then file bk and surrender your home.....this money is not being spent any more.....you can save it..... DUH.....
At least they are saving it!!!! - ISN'T THAT WHAT YOU STRESS----- SAVE! SAVE! SAVE!
Now you want to yell "fraud"?????? Saving is not considered "fraud"..

Which way is it for you????

Minny

[Lightning]

Hiding money in safe deposit box to avoid it being discovered by the trustee is fraud. Why didn't "almost_homeless" use a savings account? Obviously there's a reason they hid the money in a box.

[Minnymouth]

Lightening,
Not all people put all their money in a savings account.........lots of us deal in cash...........our little nest egg so to speak......
Not all people use banks either, so guess that's "wrong" in your opinion also???? My dad never used a bank in his lifetime.......

Besides money acquired after BK is considered yours unless you win the lotto or have a big inheiritance.....

So you think I should tell the Trustee everytime I put a dollar "back" for a rainy day???

Wake up and get real Lightening,

Minny

[StaciMM]

Concerned-what state do you live in? Each state has certain amounts they allow you to 'exempt' meaning that you can keep even in BK. Some states allow you to choose from the state exemptions or federal exemptions.

If you use the cash you save during BK to buy a car, you should be fine with that. Before making a purchase, though, get familiar with the exemptions you'll be filing under.

[Lightning]

There's only one reason to put money in a safe deposit box rather than a savings or checking account. That's to hide it. The OP obviously doesn't have anything against banks or the money wouldn't be in a bank.

I know you don't like me, Minny. I can live with that. But you need to turn down the spite. You're giving bad advice just so you can say the opposite I say.

Some people who lived through the Great Depression still don't trust banks, and I can understand that. But bank accounts are now insured by the FDIC. Who insures your money if you keep it under your mattress or in a shoe box and someone steals it or your house burns down?

[almost_homeless]

Sounds like textbook fraud.

"almost_homeless" is a pretty ridiculous name given you have ten grand in cash.

HOw is it fraud? My attny took care of everything and ALL paper work was filled out correctly and honestly. I don't know what State your in. But in Ohio they didn't ask anything about what i intended to do with MY money. This is money that was saved that would normally been my mortage payment and other bills that were listed in BK. Duh...ok?

As far as the name...its just a name...just like yours. :P~~~~~~~~~~~
Do you know the definition of almost?

[almost_homeless]

Hiding money in safe deposit box to avoid it being discovered by the trustee is fraud. Why didn't "almost_homeless" use a savings account? Obviously there's a reason they hid the money in a box.

Why? First of all, it was a choice. I didn't hide a thing. I chose this way for reasons that are no one elses business. I am not gonna defend myself and reveal personal info to satisfy you. The point is...i chose to do it that way, and there is NOTHING wrong with it. The question was asked "what to do with the money" and i gave my opinion...and that was all it was. There is nothing containing Fraud with keeping your money where you want too.

[Minnymouth]

Lightening,
You say I don't "like" you!!!! I don't know anything about you to form an opinion like that..... besides I'm not on this forum to "like or dislike" anyone!!
I agree with a lot of your "financial advice" that you have to offer - just not in your way of presenting it to all of us. You could use a lot more "tact" and "respect" when presenting your point of view...
I will defend you if I feel you are right and voice my opinion if I feel that you are being unfair and unjust!!
This forum is not about you and not about me, its about being supportive and informative to those that are filing bk or have filed............lets keep it that way!!!
That's all I have to say on this matter!!

Minny

[almost_homeless]

Ditto!

Concered....Please give an update when you can. I hope it all works out for you!