Keep house to qualify for a 7??

[Jacinta]

At the atty today he said that my income was over the median for Florida and would be a chpat 13. Then he said if I keep the house and car which I am upside down in both it may qualify me for a 7. How does ths work? Is there certain debt ratios that they look at?

[keepmine]

It's not a debt ratio it's your monthly disposable income.

I'd see another few lawyers. You posted that you'd taken a pay cut. If you wait a few months will that move the median numbers in your favor?

[danaf]

Well - different jurisdictions work differently. But you could include the house and car in the bk, yet still keep them. All you have to do is continue paying on them. So in otherwords, don't reaffirm anything but still have intentions to keep. This way, if something happened after your bk where you could not pay, you can just walk away because they were included in the bk.

On my petition I put that I intended to reaffirm my car. I included it in my monthly output. But in the end I did not submit a reaffirmation. And I continued to pay on the car until last month because I decided to give it up.

Does this make sense? If you consult other attorneys, I would tell them that you want to keep your house & car but you don't want to sign reaffirmations for them. Don't give them the idea that you are just doing it to qualify for a 7. See what they say. Anyways, the reaffirmations have to be approved by a judge and most judges these days won't approve because they are aware of the hardship a reaffirmation may cause.

With all the foreclosures and cars in the lots, these days all banks want is their money. If you pay, you can stay. It's pretty much as easy as that.

[Jacinta]

Should I also continue to pay the second mortgage?

[StartingOver08]

Jacinta, I think you are in the Southern District of Fl and if you are current on your mortgage and your car you can include the payments in your budget.

Danaf has it right - if initially you say that you want to keep the house and car in your petition and then DO NOT actually sign the reaffirmation agreements, you can surrender the car and the house at any time without recourse.

You can do this formally by changing your Statement of intentions after the 341 and just before your discharge to reflect your change. The new filed statement would show that you are surrendering both the house and car.

Or you can do this informally by just walking away after the discharge and having your attorney notify the lenders you are surrendering. (Or just plain walk away). In either event, the lenders can not come after you on discharged debt as the debt has already been included in your bankruptcy.

[Jacinta]

I am current. So I guess I still have to pay the second mtg. That is great news that I can surrender when all is done. I am upside down in both by 110k. Thank you so much for the info.