Lawyers disagree - Need real world advice

[Steve08087]

I've seen three lawyers in NJ where my home is. All three agree Ch 7 BK is the way to go. The first lawyer who lists "Stopping Foreclosure" as part of his service suggested that we answer the foreclosure summons, request loan docs, investigate for mistakes, which will stall the process...while the other two lawyers said it didn't matter if or when I answered the foreclosure summons,,,that the courts are so backlogged with these cases that i'm looking at a year or more before any real eviction could take place. My gut says to go with the 1st lawyer who wants $800 retainer (just for handling the foreclosure summons), all 3 quoted approx a $1500 fee for my Ch 7 BK. Am I wasting my money?, the other two lawyers seem to think I can file motions or answer the complaint pro se.

[sharksfan]

What are you looking to accomplish? Do you want to keep the house?

[Steve08087]

re: Keeping the house

We'd love to keep the house, but it may be unrealistic. We figured out that a Loan Mod of 31% of my gross income (plus property taxes of $650/mo) puts us at about the same $2200 interest-only mortgage payment that we can't afford now. So the logical plan is to put off the eviction process as long as legally (not morally) allowable. If we could get a 30 yr fixed at 2% from BofA - like others have - we could stretch our budget to afford that $1700/mo payment (incl the taxes). To rent in our area of Southern NJ, we are looking at approx 1300-1500/mo for a small house. We were CountryWd - now BofA. No payments since Oct 09, just served 2 weeks ago.

[catleg]

Have you run the numbers for a chapter 13? It's a question of whether it makes sense for you to pay back the arrearage of the mortgage over 36-60 months, or just live rent-free for as long as possible then start over. You can probably requalify for a mortgage in 2 years with 3.5% down, if you believe what the gov't is saying. The alternative is rolling the cars and mtg arrears into a ch13 for like 60 months at 500/month. If you can rent for less money that would be a big difference in your monthly nut, although the other question is how long are those student loans in deferral, ch13 would keep them at bay for a longer time too.

[Steve08087]

The 13 doesnt work for us. The 500+ more a month, on top of the best Loan Mod I could get, puts us at a higher monthly payment than we have now. The numbers just don't work for the 13. We need to do a Ch 7, wipe out 44k in consumer debt, then focus on living here (at 2% 30-yr fixed) or finding a place to rent. In either worst-case scenario, living rent free as long as possible (delaying foreclosure or prolonging mediation) is our best option considering the $ we'll need to find a new place - should our plans to stay not work out. The student loans aren't an issue again until March 2011. And then I plan to be a FT student in Sept 2011, so the student loans could be on-hold again thru 2014.

[catleg]

Yeah I tend to agree...mortgage mod ain't gonna help as much when you're paying NJ real estate taxes. I think you've got the right approach. I'd figure out a way to claim and spend that tax refund first. Ideally you'd hold off filing until right before they're ready to auction the house...throw them off by a few months. You could theoretically file a ch13 and then convert to a ch7, as an option that might buy some extra time. Either way they'd have to wait you out or file Motion for Relief from Stay to kick you out. One other thought, are you still paying the credit cards? Have you plotted your income to make sure you stay below median no matter how long you drag it out? And I would probably go with the first lawyer as long as costs don't get out of hand and he understands you just want to buy time.

[lorrieduke]

Correct me if I'm wrong but I don't think you can get a 2% interest mortgage modification for 30 years. I think the 2% is the first stage only in the modification program and it's only for five years. Then after that it goes up something like 1% a year until you reach your original interest rate (I think).