Loan Modification during CH7

[berry417]

Hello..I am new to this board, and I am looking for some advice. We filed CH7 several months ago but have still not been discharged. The trustees have asked for more time to review our case...ugh! In the mean time, we have fallen behind in our 1st & 2nd mortgage. They will not accept any payments from us unless it is for the total amout due (which we do not have laying around). Our first mortgage just filed for relief from the stay. My question is..is there anything I can do to try to save the house? I have some money saved up, but not enough to bring the loan current. Do you think that applying for a loan modification at this time would help us out? Has anyone been in this situation and had a good outcome?

[TBW]

I was approved for a loan modification on my first after I was discharged. This loan was included in the bankruptcy and not re-affirmed. It was through CitiMortgage.

[SMinGA]

What is the value of the house? How much do you owe on the 1st? How much on the 2nd? What is the monthly payment of the 2nd?

If your house is worth less than you owe on the 1st, you could strip the lien for the 2nd and convert it to unsecured debt - by converting to a ch. 13. If not having to pay the2nd would give you enough DMI to pay a plan payment, that could be a way to resolve it.

[berry417]

Mortgage

Hello. We owe 190k on the first and its worth 175k (according to the 1st mortgage company). We are behind several months because they will not accept any payment less than the total amt delinquent (which is around 20K). Our 2nd mortgage is $700 per month and we owe about 50k on it. The first mortgage is the only one that is making any moves. The 2nd mortgage has been quiet. I requested the load modification packet, but Im not sure we will qualify. We filed Ch7 because of our CC debt. If I understand correctly, If we go CH13, we will have to make payments on all the CC debt. We dont have the monthly income to pay the mortgages & CC debt...which is why we went the CH7 route.
My husband is an electrician, and has been out of work the last couple of winters. He is currently working, but we are so far behind on everything that we wouldnt be able to make all the monthly payments.
THanks for any advice!!

[SMinGA]

In a ch. 13, you pay your 'disposable monthly income' into the plan.

Net income less bills/expenses = disposable monthly income.

It is important to properly budget, so you know what you need monthly for expenses. (Groceries, household needs, clothing, etc. etc. etc.)

The monthly payment must be enough to cover priority debts (mortgage arrears, taxes, etc.) and a little more for the trustee who deducts 5-10% (depends on the district) to cover his/her expenses in administering the plan. Depending on your DMI, unsecured creditors will get whatever is left after resolving the priority debts. Sometimes that is alot - sometimes none.

For the ch. 7 that you filed, what was the net result of schedule I (income) less schedule J (expenses)? Are the expenses listed correct for what you pay/spend each month? I'm assuming the 2nd mortgage is listed on sch. J as well. If you were not paying the 2nd, would you be able to pay $600-700 per month as a plan payment? (I'm basing that off your statement that the 2nd is $700/mo.)

With ~$20k in priority debt, possibly some more for atty fees (some attys allow you to pay some upfront and include part of their fee in the plan) you could probably work out a ch. 13 for about what you're paying now on your 2nd and cure the mortgage arrears. Would HAVE to keep current payments going forward though. Meaning if you submit a budget that is wrong and you fall behind on your mortgage again, it would not be good.