Retained an attorney today...

[HAP]

He went over our paystubs and expenses. He said it looks like he could do a 7 or a 13.

We were over the median but with all our expenses, we're definitely in the hole with all our secured debt.

If we can get our house appraised lower than what we owe on the first mortgage, he said we could probably get the lien stripped on the 2nd mortgage in which case we'd have to file a Chapter 13 and we'd probably be looking at paying about $100/month for 36 months if we went that route which would include any more of his fees and the trustee's fee.

If we went the Chapter 7 route. We'd have to come up with another $1200 upfront and we'd give up the house (not looking to pay $1,200 on 1st and $510 on 2nd mortgage for a house only worth maybe $163,000 at most.

Thanks for everyone's help/advice here so far. There will be more questions I'm sure

[kiddles]

COnsult a few more attorney's - they generally have a free consultation.

If you are over the median, it's automatically going to be a 5-year plan if you file a 13. No way to make it a 3-year plan.

[hrh25]

Kiddles is right, if you are above the medium income for your State then you have no choice but to be in it for five years. Also, correct me if am wrong but i thought you had to have at least $150 of disposable income to be in the chapter 13 plan.

Regards

HRH

[HAP]

Well I've already retained him and he is a trustee also, so I would think he knows what he's doing. He's done this type of plan for many others, so we shall see.

Maybe I misunderstood him and we weren't over the median. I'll check on it.

[FreshLikeADaisy]

HAP, you heard him right. You can be over the median and still be eligible for a 7; it's just more hoops he has to jump through to do it for you. A lot of it has to do with the way he files your expenses. If worse comes to worst, you will still qualify for a 13, so you might as well go for the gold with a 7 if he feels you can get one.

[HAP]

Thanks Daisy.

Our biggest thing is wrestling with what to do with our house. If we can get rid of that 2nd mortgage, it would be so much easier to just stay where we are, then have to come up with all the deposits, pet deposits (or even find somewhere that will take our indoor cats) move all our stuff, possibly have to switch school districts, etc., etc.

Then again, cutting clean from everything in 3-4 months is sounding pretty good too (other than having to find a new place to move). We still have some time so we'll have to take some time to think it over.

On another note, I'm mentally/emotionally starting to feel better already about this decision.

[325Falcon]

What do you mean by "get the lien stripped on the 2nd mortgage " ?

[HAP]

The attorney has done this several times with past clients and this is what he told us (we're in NC by the way).

We owe about $162,000 on 1st mortgage and $47,000 (appx.) on a 2nd mortgage. He said that if the (appraisal) value of our house is lower than what we owe on the first mortgage, the 2nd mortgage can be stripped off (and that debt gotten rid of) because there is no equity attaching the house to the 2nd mortgage.

We would have to get an appraisal done and he said even if there was just $1.00 in equity, it couldn't be done. So if we did this, we'd need the appraisal to basically come in under $162,000.

According to county tax records, our house is est. to be worth about $163,000. However, in looking up the other houses on our street which are the same model, those houses come up valued around $153,000 to $157,000. So it could go either way.

The sticking point he told us is that this can only be done under a Chapter 13 not a Chapter 7 and therein lies our dilemma.

My mood today is to file a chapter 7, stay in the house as long as we can until they foreclose and put that money into savings and then find some place else to live after hopefully 6 months of socking that money away into savings. I think I'm going to try to convince my husband of this (he's too attached to the idea of staying in this house).