I just want out of my house

[whoswithme]

Hi. New here. I bought my first home in 2007. Live in Central Florida. I'm married, but only my name is on the mortgage. Same old sob story: my house has depreciated over $100,000 and we dont want to keep it. We got in way over our heads, our mortgage is way too high. We've had a baby since then and I want to be able to stay home with her. We don't have much credit card debt (7K), and most of it is in his name. After doing a quick examination of the means test my lawyer said *maybe* he can get the numbers down so we can file ch 7. My question is, is it worth it to file BK if all we want to discharge is the mortgage? Should I just file on my own? If we file ch 13 and all that's discharged is the mortgage, how does that work i.e. what would the payment be based on? Thanks for your wisdom.

[whoswithme]

BTW, it's been for sale since January, not even one interested buyer.

[lrprn]

Hi. New here.

Welcome! Glad you found us!

My question is, is it worth it to file BK if all we want to discharge is the mortgage? Should I just file on my own? If we file ch 13 and all that's discharged is the mortgage, how does that work i.e. what would the payment be based on? Thanks for your wisdom.

First, you need to meet with at least 2-3 experienced bk lawyers besides the first one to get a clear idea about what may be possible to do or not do in your situation.

Next, since you two only have $7K unsecured debt, it sounds like you must have way-overreached with this house. If you are paying more than 33% of your combined income as a house payment, then you are way too house-poor.

Now, before I would pull the bk trigger with only $7K unsecured debt, I'd try to work with my lender to see if I could get the mortgage loan modified. Have you tried that yet? Have you considered a short-sale on the house? Have you considered doing a deed-in-lieu? (More on those options here - http://www.mortgagefit.com/deed-lieu.html )

I wouldn't pull the bk trigger unless I truly had no other choice. If you haven't investigated any other options but bankruptcy to deal with the mortgage yet, you aren't ready to pull the bk trigger just yet.

[whoswithme]

Thanks for your reply. I have talked to the lender who said that we are not qualified for a modification. But we haven't missed a payment yet AND I'm still working full-time which I plan on changing very soon. I guess I need to cut back my hours and start missing payments, maybe then they'll work with me? I definately do not want to stay in the house so a modification wouldn't make me happy anyway. As for short sale, my realtor said they can still come after me for the deficiency judgement, anybody know anything about that??
Thanks!

[maiabon]

So Im curious! Did you file? If so, who did you use for an attorney?

[badhouse]

As for short sale, my realtor said they can still come after me for the deficiency judgement, anybody know anything about that??
Thanks!

In your short sale negotiations you must get the lender to agree in writing that the completion of the short sale will relieve you of your legal responsibility for the reaminder of the debt. Your lender may or may not agree to such a stipulation.

Since you live in Florida, I say the odds are good that they really don't want that house back and will likely back down rather than let the home go into foreclosure. However, your agent or your attorney will have to negotiate this. Giving up their legal rights to pursue you for a deficiency will not be the banks default position.

Don't sign anything that would make you liable for a deficiency. If the bank won't relent, file for bankruptcy and forget the short sale. You can live rent free in your house for a year or two while they foreclose.

[badhouse]

Whoops! That post was three months old. I too would be interested to see what you did!