Walk away without BK in Minnesota. Questions

[johninred]

So I have 618k in the house:

$498k primary with wells fargo mortgage
$120k secondary with wells fargo bank

The house is worth $340k on the market likely $290k in a bank sale.

Payments are difficult given a reduction of income, change in job and more expensive day care due to the hours the new job offers.

I just had a $974 car repair that killed me. I'm now 30 days late.

I make enough income to disallow chapter 7.

I don't care about the house (anymore) and just want me and my family to be happy and reduce our stress.

My biggest concern is a judgement against us, post sheriff sale, which could be (in theory) $250K or more with fees.

I have zero assets besides the house. (cars with loans higher than worth, no toys).

Biggest expenses are CC we lived off between jobs (stupidly), day care and the house.

Considering Chapter 13 but it would seem not needed until it was proven the judgement would even be filled.

[helpmeout]

You may not have any assets, but you do have a job and I am assuming bank accounts. If you are in a state that allows garnishment, they can go after that. And they can levy bank accounts.

And if they don't come after you and forgive the debt, well, the IRS will come after you for the taxes on the "income". You won't have this issue if you file a Chapter 13. Just something to think about.

[bkw1nter]

I made way to much to qualify for Chapter 7 also 100k+ however because my mortgage was so much and some other debts I cleared the means test and was able to file. I was originally going to keep the home but realized I couldn't.... But because I included the mortgage in the BK now no one can come after me for the 200k I am upside down.... Also by filling Chapter 7 it adds months that you can stay rent free.... We applied for HAMP got denied because the payment was still to high and now we are going to try a HAFA short sale I have been living rent free for 24 months.... Make sure you get a good lawyer it cost my wife and me 3k but well worth the price.... Good Luck!

[iv65536]

So I have 618k in the house:

$498k primary with wells fargo mortgage
$120k secondary with wells fargo bank

The house is worth $340k on the market likely $290k in a bank sale.

Payments are difficult given a reduction of income, change in job and more expensive day care due to the hours the new job offers.

I just had a $974 car repair that killed me. I'm now 30 days late.

I make enough income to disallow chapter 7.

I don't care about the house (anymore) and just want me and my family to be happy and reduce our stress.

My biggest concern is a judgement against us, post sheriff sale, which could be (in theory) $250K or more with fees.

I have zero assets besides the house. (cars with loans higher than worth, no toys).

Biggest expenses are CC we lived off between jobs (stupidly), day care and the house.

Considering Chapter 13 but it would seem not needed until it was proven the judgement would even be filled.

You may want to look at the entire means test. Even if you are over median, you may still be able to go Chapter 7 based on DMI. Keep in mind that the allowable housing expenses would be considerably higher in the metro counties.

[ldm]

We tried to walk away from home with 1st mortgage of $125,000 (Chase) and second $27,000. We quit making payments assuming a foreclosure and did not intend to file bk. The first has not yet foreclosed, but the 2nd has filed suit on the note for $27,000 plus costs in order to obtain its $ rather than foreclosing forcing us into bk.

[iv65536]

We tried to walk away from home with 1st mortgage of $125,000 (Chase) and second $27,000. We quit making payments assuming a foreclosure and did not intend to file bk. The first has not yet foreclosed, but the 2nd has filed suit on the note for $27,000 plus costs in order to obtain its $ rather than foreclosing forcing us into bk.

OK, where is this property? Is it also in Minnesota?

[ldm]

We live in Iowa, and also have 0 assets. I would at least consult an attorney and start preping for a bk "just in case". We didn't and have used some credit recently as we never intended a bk, which may make our bk a bit more complicated.