Trying to save our house from foreclosure....Help!

[AnxiousMama]

Due to a decrease in income (husband's job relies on new homes being built, which there is a serious lack of), having our first baby in August, and my wages being garnished (Discover credit card) we have fallen behind in our mortgage. We were behind 5 months in mortgage payments, but in the past 6 weeks have got it down to owing 3 months. Our electric and water are getting ready to get shut off (haven't been able to pay these trying to catch up mortgage), and our car insurance is about to be cancelled (for lack of payment).
We have spoken to our mortgager (Wells Fargo) and they sent us the packet to fill out with the hardship affidavit and we submitted paystubs and monthly living expenses as well. Well, that was about 6 weeks ago and still no answer. We call them every week and they keep telling us that they have our documentation but no one has reviewed it yet and they don't know when someone will. They just keep saying to call back in a week and check on the status. We got a letter saying they've started foreclosure proceedings, but they told my husband on the phone that that hasn't happened yet.
I don't see us realistically being able to catch up our mortgage (on our own) completely for at least another 2 months...and I seriously need to pay some other bills so we can actually live here with heat and water! I'm just scared they will start foreclosure proceedings before then. I submitted our financial info. to HopeNow today, but they said it would be another 5-7 days at least before we heard anything. Has anyone had to deal with Wells Fargo in a similar situation? What would you do? If they start the foreclosure process, will it stop if all payments are caught up within that 30-60 day window? We cannot lose our house!! I'm not expecting a load modification (I think we make too much money and we have a really low interest rate already.) We were hoping for a repayment plan or something. Any advice? Sorry so long. TIA!

[325Falcon]

Yes my advice is to go talk to a bankruptcy lawer, file for bankruptcy get rid of all your unsecured debt and any bad debt you have. Then with this fresh start you can live without all the stress and raise your baby knowing all these creditors cant do a damn thing to you.

Chances are that you are upside down in your mortgage, correct? If so how far?

[AnxiousMama]

I probably should have said this earlier: We have already met with a BK lawyer. We owe $2600 on one of our cars (my mother-in-law was a co-signer) so as soon as we pay that off we are hoping to file a 7....probably will be ready to file in the next 6 months or so. Our original mortgage loan was for $145,000 and we owe about $138,000. We could probably sell it for at least $135,000-$140,000. We really, really want to keep our home!

[AngelinaCatHub]

I probably should have said this earlier: We have already met with a BK lawyer. We owe $2600 on one of our cars (my mother-in-law was a co-signer) so as soon as we pay that off we are hoping to file a 7....probably will be ready to file in the next 6 months or so. Our original mortgage loan was for $145,000 and we owe about $138,000. We could probably sell it for at least $135,000-$140,000. We really, really want to keep our home!

To be as kind as I can: 'AM', you need to consider getting rid of ALL debt and once you file bk, the garnishment will stop. You may be able to have the Judgment set aside, and start to shop for a cheaper rental with utilities included or at least affordable. Now you say you make too much money? Hubby is in new house building? No new house would compete with the rapidly increase of repos. They will become dirt cheaper. I doubt you could sell your house to equal what you owe.

I am saying, you need a new start, that means, starting over. I have done this several times in my life not in bk but in my later years bk was my only option. We were worth many $$ and for reasons I wish not to discuss, we lost our money. We are now living in our means. Not the life style we were used to, but, we are happier and can sleep at night. We needed a break, and bk gave it to us. We did have to suffer a bit, but to heal, you have to do this. A house is not a home. A HOME is where you make it. It could be a tent if you love each other and family. Free of worry and obligation. Not yoked to some person or company. Free is what I am saying. Right now, you are a prisoner of your house. Divorce your house and move on to a "home". GBWY 'Hub

[BKDefender]

My suggestion? File bankruptcy, have your attorney file a motion for return of your garnished wages during the 90 days prior to filing (make sure to time the BK filing right after you're paid again and its garnished so you get the maximum amount back), exempt as much of that cash as possible, notify your utility companies so they cannot shut off your utilities, pay your car insurance, and use the next 2-4 months of non-garnished wages to put a deposit down with your utilities (they'll often require it if you filed BK with a balance owed), and to catch-up your mortgage.

Don't wait to pay off your car - if you don't get your wage garnishment stopped it sounds like you're going to go past a point of no return with utilities, car insurance, and foreclosure sale of your house.

If you make too much for a chapter 7, do a chapter 13. Either way, you need to stop your wage garnishments to keep from falling off the cliff.

--William

[AnxiousMama]

Don't I need to pay off the car first to keep them from going after my mother-in-law (co-signer) for the remaining balance owed on the car?

[BKDefender]

You only need to pay off the car if you plan on surrendering the car in bankruptcy. If you plan to keep the car by reaffirming the car loan at the current amount owed, then just reaffirm it and keep paying it. As long as you reaffirm the current car loan then you'll be liable for the loan just as you were before filing BK.
Unless I missed something in your first posting?

--William

[HakunaMatata]

Don't I need to pay off the car first to keep them from going after my mother-in-law (co-signer) for the remaining balance owed on the car?

I suspect you're concerned with "preferential payments". In your scenario, a secured loan with a co-signer, this would not apply. If your intentions are to file BK, keep the vehicle, and remain current on the loan (reaffirm the loan or ride-through if the lender permits), there will be no adverse effects to your MIL. If you have equity in the vehicle, you want to understand your exemptions to ensure it is protected.

[AnxiousMama]

You only need to pay off the car if you plan on surrendering the car in bankruptcy. If you plan to keep the car by reaffirming the car loan at the current amount owed, then just reaffirm it and keep paying it. As long as you reaffirm the current car loan then you'll be liable for the loan just as you were before filing BK.
Unless I missed something in your first posting?

--William

Is this true regardless of whether we file a 7 or 13? I'm not sure what we're going to qualify for yet. If this is true in both scenarios I'm calling my lawyer asap! That's the best news I've heard in months! Thank you all so much for your help!