Ch 7 Include House while waiting 4 a Mod.?

[2muchinDebt]

We have been waiting to file Ch 7 because we are waiting for Chase/Wamu modification.

We want to keep the house, but only if the loan mod. is to where we can pay it. DH has a great steady job for 4 yrs which is pretty safe. We are in VA.

Haven't paid credit cards since Nov. 2008 and have been on a cash only basis since then.

We are under water $100k and have a HELOC of $45k both are Chase/Wamu owned loans. Chase/Wamu said we are almost to underwriters and it would be a few weeks yet.

TO THE QUESTION:

Now..I was wondering....could we go ahead and file Ch7 now and include the house and HELOC in it? Then, not pay the mortgage (which we already missed June's payment) and hope they get us the loan mod. sooner? If it's not do-able then we can leave and walk away and not have to pay the taxes or difference in what we owe and whatever it sells for?

WHat happens if we wait? The cards have been charged off and are at collection agencies now. Once DH gets a judgement for garnsihment we'll HAVE to file regardless.

Can anyone help with this and answer? Thanks!

[justbroke]

You are in a catch 22.

You say you won't keep the house if you don't get a mod... but you want to file bankruptcy? Filing bankruptcy will stop all the negotiations around a modification, so you need to get the modification in place first (and perhaps get through the 3 month trial period before the modification actually kicks in).

Now that I read about the $100K negative equity... I have to ask myself... why would you keep the house?

(If this is a home worth $1,000,000 or more (actual current value) then forgive me and ignore what I wrote... but if the negative equity (of $100K) represents more than 10%... I stand by my question.)

Filing bankruptcy, and including the house in the bankruptcy (surrendering it) basically shuts down ALL hope of getting a modification. The reason why? Because you won't legally owe the lender any more money! They can't enter into any "modification" after the discharge, as that would be considered a post-discharge "modification" which is forbidden.

You need to sit down and ask yourself, why you would pay $100K more for something than it's worth? Really start thinking about the house as just a pile of wood, nails, sheetrock, windows, and concrete. You home is in your heart and where you make it. Don't confuse the two.

[Lajazz947]

You are in a catch 22.

You say you won't keep the house if you don't get a mod... but you want to file bankruptcy? Filing bankruptcy will stop all the negotiations around a modification, so you need to get the modification in place first (and perhaps get through the 3 month trial period before the modification actually kicks in).

Now that I read about the $100K negative equity... I have to ask myself... why would you keep the house?

(If this is a home worth $1,000,000 or more (actual current value) then forgive me and ignore what I wrote... but if the negative equity (of $100K) represents more than 10%... I stand by my question.)

Filing bankruptcy, and including the house in the bankruptcy (surrendering it) basically shuts down ALL hope of getting a modification. The reason why? Because you won't legally owe the lender any more money! They can't enter into any "modification" after the discharge, as that would be considered a post-discharge "modification" which is forbidden.

You need to sit down and ask yourself, why you would pay $100K more for something than it's worth? Really start thinking about the house as just a pile of wood, nails, sheetrock, windows, and concrete. You home is in your heart and where you make it. Don't confuse the two.

OK, now I have a new question on this.

I have not signed any reaffirmation papers with either the first or the second.

First is with Wachovia, a pick a pay from World savings, the second with Wells Fargo, essentially the same company.

I think I understand the no modification if no reaffirmation issue, it makes sense but Wachovia has not even bothered me about the reaff and they said that once I get my discharge then they would work on a modification.

Since I need to modify should I call them and ask about a reaffirmation?

Question is, no modification without a reaffirmation?

[CCCrazy]

From what I've read with other people, you do not need a reaffirmation to do a modification after discharge. Relief, who is on this board, is in negotiations with Citi to modify her 2nd mortgage right now. It sounds like it's up to the bank.

[justbroke]

Since I need to modify should I call them and ask about a reaffirmation?

Yes, but I don't know that you should re-affirm.

Question is, no modification without a reaffirmation?

They (who you talked to at Wachovia) may not understand the legal implication. If you get discharged and didn't reaffirm, you are no longer responsible for paying the mortgage... plain and simple. While you can continue to pay and stay current, and avoid foreclosure... they technically can't "modify" a non-existent contract!

Again, on the re-affirmation... if you don't plan to do one, please expect that you can't do any "post-discharge" modification. The reason is... modify what? A non-existent contract that removed your personal liability? While Banks have done this post-discharge modifications, they can be subjected to litigation because, unless it's a new agreement (new contract.... which some say a re-affirmation is, but most just "incorporate" the original agreement) then most Bankruptcy Courts consider that a "post-discharge" re-affirmation, which is not allowed.

If you are planning to re-affirm, I want you to think about the $100K loss you will "sign" up for.

[2muchinDebt]

You are in a catch 22.

You say you won't keep the house if you don't get a mod... but you want to file bankruptcy? Filing bankruptcy will stop all the negotiations around a modification, so you need to get the modification in place first (and perhaps get through the 3 month trial period before the modification actually kicks in).

Now that I read about the $100K negative equity... I have to ask myself... why would you keep the house?

(If this is a home worth $1,000,000 or more (actual current value) then forgive me and ignore what I wrote... but if the negative equity (of $100K) represents more than 10%... I stand by my question.)

Filing bankruptcy, and including the house in the bankruptcy (surrendering it) basically shuts down ALL hope of getting a modification. The reason why? Because you won't legally owe the lender any more money! They can't enter into any "modification" after the discharge, as that would be considered a post-discharge "modification" which is forbidden.

You need to sit down and ask yourself, why you would pay $100K more for something than it's worth? Really start thinking about the house as just a pile of wood, nails, sheetrock, windows, and concrete. You home is in your heart and where you make it. Don't confuse the two.

If we kept the house w/o a mod. our loan would reset in a few yrs.

You do have some key points. So after we file we wouldn't be able to modify the loan? Also what's a "ride through?" I've seen that mentioned.

I'd like to keep the house, but if it goes, it goes. I have 2 kids in a grfeat school district, nice area, and great neighbors and friends who we all count on each other to watch each other's kids if something happens. It takes time to build up those relationships and trust.

Chase/Wamu know we are close to filing BK..we've told them and also included it in our hardship letter. I wouldn't reaffirm unless I had a signed agreeement to the mod. in the hand first.

This is so confusing.

[Lajazz947]

Yes, but I don't know that you should re-affirm.

They (who you talked to at Wachovia) may not understand the legal implication. If you get discharged and didn't reaffirm, you are no longer responsible for paying the mortgage... plain and simple. While you can continue to pay and stay current, and avoid foreclosure... they technically can't "modify" a non-existent contract!

Again, on the re-affirmation... if you don't plan to do one, please expect that you can't do any "post-discharge" modification. The reason is... modify what? A non-existent contract that removed your personal liability? While Banks have done this post-discharge modifications, they can be subjected to litigation because, unless it's a new agreement (new contract.... which some say a re-affirmation is, but most just "incorporate" the original agreement) then most Bankruptcy Courts consider that a "post-discharge" re-affirmation, which is not allowed.

If you are planning to re-affirm, I want you to think about the $100K loss you will "sign" up for.

Thanks, never thought about that.

I am eaither breaking even or have some equity in the house and plan to stay here unless I win the Lotto.

The 100K guy is the OP so I am going to inquire tomorrow.

[justbroke]

You do have some key points. So after we file we wouldn't be able to modify the loan? Also what's a "ride through?" I've seen that mentioned.

A ride-through is where you don't neither reaffirm, redeem or surrender. You basically take no action, the mortgage debt is automatically discharged and you just keep paying. The key is, you must be current and keep current! You can then "walk away" from the home at any time in the future, as you don't personally owe any money. However, if you don't keep current, the Bank can and will sue for foreclosure to kick you out.

I'd like to keep the house, but if it goes, it goes. I have 2 kids in a grfeat school district, nice area, and great neighbors and friends who we all count on each other to watch each other's kids if something happens. It takes time to build up those relationships and trust.

Is that worth $100K, right now? If you had $100K right now, would you give up the $100K to keep the house?

Chase/Wamu know we are close to filing BK..we've told them and also included it in our hardship letter. I wouldn't reaffirm unless I had a signed agreeement to the mod. in the hand first.

Unfortunately, they don't care what you write in those hardship letters. They just care that you wrote one. You can put that it's a hardship because you think Area 51 has spaceships there. I know that's not helping, but your hardship letter is not a negotiation.

This is so confusing.

It's difficult because you're thinking about your house (home) and family. It's okay to be confused, distraught and feeling vulnerable. However, this is the time to learn what your options are and what you want to do. You have to start thinking of the whole Bankruptcy as a business decision.

I hope that the lawyer you retain will walk you through the same points I brought up. None of these are easy decisions, and while I can sit here, from afar, and say "just dump the house", I have no idea about your situation at all. I do know that I'd walk from this house in a heartbeat, although it's my favorite home, the kids are in "A" rated Schools, in the best and most desirable address (subdivision) here, and a place that doesn't even look like you're in Florida! Yet, I'd walk away.

[Lajazz947]

Funny

Area 51 spaceships, that's good.

[2muchinDebt]

I know....if the loan mod. was a decent one with affordable payments and a fixed rate. Yep...I'd keep the house. Crazy? Maybe. I have been over to the loansafe.org boards and have read sooo many stories. Maybe I am misinterpreting some of them which is why I may be confused. I do get what justbroke is saying though. I think in the back of my mind I am prepared to move because I doubt Chase will come through.

[justbroke]

I know....if the loan mod. was a decent one with affordable payments and a fixed rate. Yep...I'd keep the house. Crazy? Maybe. I have been over to the loansafe.org boards and have read sooo many stories. Maybe I am misinterpreting some of them which is why I may be confused. I do get what justbroke is saying though. I think in the back of my mind I am prepared to move because I doubt Chase will come through.

I tried to read loansafe a couple of times. There is so much mis-information there, it's frightening. If you're considering Bankruptcy, stick to the real deal here at BKForum.COM!

[eddiep]

I cant advise you on what you should do but I also needed a modification to be able to keep my house. I am not upside down but we have taken all the equity out over the years, yeah the old peter and paul story. I applied for a mod in Jan but denied, I sent an email to Ken Lewis, CEO at Bank of America and complained, a rep called me one week later and I was approved on March 4th. I have completed the modification on my second and third mortgages, and in the final stretch on my first. I was able to lower my payment by $1030 a month. BUT I was able to stretch my loans out to 30 years and they lowered my interest rate from 9.09% to 6.09% on one of the loans. I had been paying on these loans for a long time so stretching out to 30 years may not help others who have not owned their home for a long time. My lawyer absolutely insisted that we complete the modification before we file! It has been very stressful, we are currently being sued and it appears that the judgment will come in before the modification is complete but we can undo any judgment once we file. I got the email address for the CEO from loansafe.org, I wouldn't rely on that site for bk info but there are alot of people who have been successful in getting their mortgages modified. There are alot of members over there who have used NACA and are getting modified at 2% or 3% interest for the life of the loan believe it or not! but they are slower than you know what, (and you dont have that kind of time) but you may be able to get some useful contact infomation for your lender that could save you some time.

[chad9162]

I tried to read loansafe a couple of times. There is so much mis-information there, it's frightening. If you're considering Bankruptcy, stick to the real deal here at BKForum.COM!

I can't agree more! Loansafe appears to be a front for a law firm or they recommend certain lawyers. Be careful over there. I've noticed that they steer people away from BK even though its usually the best option.

From what I've read with other people, you do not need a reaffirmation to do a modification after discharge. Relief, who is on this board, is in negotiations with Citi to modify her 2nd mortgage right now. It sounds like it's up to the bank.

As for relief negotiating a 2nd mortgage w/o an reaffirmation you are mistaken. She is not trying to modify but settle. Two different concepts. She is trying to settle the loan by paying a lump sum of 10% in return the 2nd releases the lien.

[eddiep]

I can't agree more! Loansafe appears to be a front for a law firm or they recommend certain lawyers. Be careful over there. I've noticed that they steer people away from BK even though its usually the best option.



As for relief negotiating a 2nd mortgage w/o an reaffirmation you are mistaken. She is not trying to modify but settle. Two different concepts. She is trying to settle the loan by paying a lump sum of 10% in return the 2nd releases the lien.

I have been an active member at loansafe since january and I have never had anybody steer me towards a lawyer or away from bk. As a matter of fact I have only heard of one member who used one of their lawyers and you wouldnt believe the way she bad mouthed them. They do ask that you dont recommend other lawyers out of respect for the sponsor of their forum. And the vast majority of members do not use lawyers. But thats my personal experience.

[chad9162]

I have been an active member at loansafe since january and I have never had anybody steer me towards a lawyer or away from bk. As a matter of fact I have only heard of one member who used one of their lawyers and you wouldnt believe the way she bad mouthed them. They do ask that you dont recommend other lawyers out of respect for the sponsor of their forum. And the vast majority of members do not use lawyers. But thats my personal experience.

I'm not saying there aren't good people over there but the site as a whole appears "shady." I have notice the moderators continually post messages to seek an attorneys advice. To me it seemed like they plaster it everywhere and some even recommend their sponsors. To me the site appeared commercial and I'm sure someone is getting kickbacks under the pretense of advertising. Right now some people can be easily take advantage of. They have the blinders on and only see the good or hope. Some of the members actually tell people that BK might be a better options (that how I got here) but the mods don't.

I read many stories over there and it was clear some of these people couldn't afford their houses even with a loan mod. Yet they'd be referred to law firms that cost several thousands of dollars. No law firm is going to help them if they lost their jobs.

I work around the legal system and right now we have been seeing a huge influx of law firms negotiating credit card debt. Total scam! These law firms are so good that they're clients are still getting judgements against them. All I'm saying it BUYER BEWARE!!

A few of the mods over there are okay and actually refer people to NACA and other non profits. Just filter what you read

***When I questioned the forum they started deleting post. I think that's suspicious. They don't allow Private Messages and you cannot post non-sponsored attorneys. Hmmm!? They said it was a privacy issue. That's a crock of sh*t.