What should I do?

[deverdog]

Hi, all.
A friend of mine told me about this forum and said that there is a lot of support and knowledge to be gained here. I certainly hope so. Here's my story in a nutshell - We're currently upside down in our mortgage but were able to keep paying until my wife was hospitalized. She has COPD and suffered a collapsed lung. To make a long story short, she can't work. She just got out of the hospital and will be meeting with her HR folks to to the Family Medical leave thing, Worker's Comp, etc. My immediate problem is, I won't be able to meet the mortgage payment this month. My long-term problem is, without my wife's income, we can't afford the house. We're going to pursue disability and probably bankruptcy. One question I have is this - should I contact the mortgage holder and let them know what's going on, or am I better off just not making the payment and letting them start the foreclosure process? We don't want to stay in the house, even if it were possible to become current on the mortgage again. Sorry for being so long-winded...

[drowning123]

The first thing the mortgage company will tell you is that they can't help you with any sort of modification because you are current. So, here's my suggestion. Save yourself the aggravation. Stop paying everything to all creditors. See a couple of attorneys for free consultations. They can run your means test as it is now and see if you qualify for a Chapter 7. In your situation, whatever you do, don't get into a 13. I stopped paying my mortgage in April and filed for Chapter 7 in August. I got discharged on November 23 and I'm still in the house. Don't worry, you won't be kicked out of the house just yet if you stop paying. Sure, you'll get the harassing calls, but try to work out your numbers to see if you qualify for Chapter 7 now and go for it.

[SunshineGal]

As long as you are still living in the house, you have a 6 month right of redemption in Michigan, so they can't evict you until 6 months has passed from the date of the *Sheriff's sale*.

http://www.ewashtenaw.org/government/departments/extension/CommDevelopment/Optionsafterthesheriffsale.pdf

As for contacting the lender, it is probably worth a try, it may limit some of the collection calls. Right now you guys need to focus on your wife's health, there will be plenty of time to figure out if you need to file later. Good luck and hope this helps.

[Pandora]

Many times when you are facing a medical crisis - your mortgage lender may actually work with you, offering a deferment or something to that affect (like forbearance) if its a short term situation. Of course, make sure you know all the fine print upfront (all costs, fees *if any* and what will happen if you cannot abide by the contract/terms). As far as having to be behind on your mortgage to qualify for a modification, that is clearly up to the lender for in-house modifications - if you're trying for HAMP you do not have to be behind to qualify if you can show imminent default is likely and you are above the 31% rule. Now, with saying that - you're more likely to be hit by lightning it seems than getting approval on a HAMP modification as of late but.. its worth trying at the very least.

Wishing you and your wife many blessings and a speedy recovery.

[LimpDisc]

Make sure you wait long enough to file so you can include any of your medical bills in the bankruptcy.

[deverdog]

Thanks for the advice and the well wishes! My wife is doing better, and obviously that's our main focus. It's going to take some time to wrap my head around this new situation, but keeping in mind what's really important will help. I'm sure I'll be asking more questions as this goes on, so thanks in advance!

[SunshineGal]

Thanks for the update, so happy to hear your wife is doing better.

ps - and welcome to the forum!