Newbie- Don't know where to start! longer post. sorry

[unkelaaron]

Hello
I joined this forum a few weeks ago and I have been reading as many posts as possible and I find both inspiration and hope each time I log in. I also become a little more confused in regards to my own situation each time, so I could really use some guidance if possible.

My situation, live in NH. Primary Residence 1st with Indy Mac, 2nd with Citi, about 40k underwater in an IO mortgage that is going to adjust soon.

I also have a single family in MA that we have been renting out for the last 4 years. 1st with Astoria, 2nd with Nat City. shocker, underwater on this property by about 40-50k as well. Even renting the property out, we were losing about $400 each month. Last tennants ended up being a nightmare, won't go into it, but we finally got them out, but the house is not in shape to be shown to future tennants(which would at best give us the opportunity to lose 400 per month again).

I have about 35k in CC debt. Most of it from work done on the old property trying to get it sold 5 years ago. Most of these cards are closed out and have not been used in over a year. Most of them changed their rates and terms within the last year as most of you know, and it's just ridiculous. I'll never pay them off with things being status quo.

I am in a sales job, with compensation consisting of mostly commissions and bonus. I make decent money, but at the end of every month, after paying all of our bills, we seem to be pretty close to tapped out. This has been every month for the last 5 years and it is just no way to live.

The recent situation with the rental property, as well as the arrival of our 2nd child and my wife being on maternity leave has just brought everything to a head for us. We know that we need to do something, we just do not know what to do. I've read so many posts about foreclosures, and chapter 7 and chapter 13. My head seems to be spinning.

Because of the damage to the rental property, I feel pretty confident that it is a lost cause for us. #1 we do not have the extra cash to complete the repairs that need to be done to rent the property nor do I have the time.
#2 renting that property is a bad investment where we continue to lose money.

Our primary residence, I would like to keep if possible. My family feels safe here. I know it sounds cliche, but I truly have put a lot of blood sweat and tears into the place. But the mortgage is just not realistic for us. It was a horrible decision that is totally on me, but I can not change my mistakes from the past. We have tried for a mod, but as is obvious to most people on this forum, the process is a joke. Because we are current on our mortgage, we do not qualify. Just does not make sense to me. So, although I would like to keep this property, I understand that it is not possible under our current mortgage arrangement.

We have no retirement, no savings account, no rainy day fund and it's simply time to face the music.
Everything is in my name and I am ready to do whatever I need to do to come out the other side with a fresh start. Part of me thinks it is time to just stop paying most of these bills, including mortgages, save some emergency funds and see where it leads us, part of me feels that we should rent another house while my credit is not junk and just walk away from everything and deal with it as we have to deal with it but I dont know for sure if that is the right thing to do. We have to do something though, so I am sorry for rambling on, but any insight will be appreciated.
thanks for listening!

[BrokeinMD]

Hi Unkel - Welcome to the forum! You're best bet is to chart out your monthly expenses, and your family's monthly income, and shop for a bankruptcy attorney to go over your options. Have you taken the means test yet? Here's the link to it to help you with your research:

http://www.legalconsumer.com/bankruptcy/means-test/state.php?st=NH

Best of luck to you and your family and keep us posted!

[AngelinaCatHub]

Yes Unk, and welcome to our Forum:

You do have a situation for sure. Look first to what you have. Is the family healthy? You are employed? Your wife could get her job back after maternity leave? All these things are pluses.

Now, look at the negatives: The second house is out. Stop paying on it. Your first house is underwater and you have no savings for future or emergencies. So, stop paying on it also. Ride it out as it could be up to two years that they may take to force you out. They cannot do much until and after you file. Don't worry about rentals there are thousands of them out there.

CC's stop paying. Any future medical bill not yet billed? Wait and don't pay them.

Caution, make no preferential payment to any one person or company. Are the cars paid for? If not can you dump more than one? Can you afford more than one?

Take your extra money that you stop payment on, and locate a proper lawyer. Use this extra as his payment as you will not be filed before you pay him off.

Go C7 as that is easier and final. You need to start over clean. Take no help from family at this time. Pay no family anything at this time. Down load the C7 book from Nolo Press and read it all.

Do NOT use your credit cards at all and particularly do not attempt to cash in on them and expect them to be discharged.

Now, take a deep breath. The hardest part of this procedure is pride and guilt. Shed that idea and call this a business decision that has to be done for your own health and the welfare of your family. Once filed a big load will be off your shoulders. Trust me on that. 'Hub

[ValleYum]

Welcome, Unk!!

The words of wisdom above are wise.

The only thing I would add is a caveat gleaned from my nights of reading during my insomnia over *my* finances:

If you default on your mortgage with IndyMac (OneWest Bank), do not expect them to drag their feet on foreclosure - they have a sweetheart deal with the FDIC.

Check out the video YouTube below - it offers the best explanation of why that is.

Welcome & know this is a place for info and support!! If you get confused, don't worry just ask someone to explain it again or differently. We have all been in your shoes!

ETA: Mods - I hope posting a YouTube video in the post is okay - I presumed you wouldn't have allowed embedding if it wasn't.

[AngelinaCatHub]

ValleYum: SUPERB!!!! What a great post and if the Mod's take it down, shame on them. I never thought of this and I've got a background of computer experience. But you did goood.



An APPLAUSE for ValeYum

[ValleYum]

<blush> Awwww, thanks Hub!! I moderate on another forum that uses the same vBulletin software - so I hafta admit I knew about the embedding of YouTube videos because of that.

To embed a video just click on this icon in your reply and enter the url where prompted.

The IndyMac/OneWest/FDIC situation makes me grind my teeth. Ugh. It just highlights everything that is wrong with government agency spending.

[unkelaaron]

Thank you very much for your kind words of encouragement. That Indymac video scared the bejesus out of me though. Does anyone have any knowledge about what kind of time we are talking about with them before I would have to vacate?

[ValleYum]

I didn't mean to scare you. I just wanted you to know that your experience may be dramatically different based upon your lender and their typical speedier than average foreclosures.

http://www.homehelpnh.org/Docs/ForeclosureTimeline.pdf

I found the above with a quick Google search - about NH in general. Strategically timing your filing of a Chapter 7 bankruptcy may extend that by a month or so from what I read or until IM/OW files for a relief of the bankruptcy stay. Your mileage may vary.

Anyone here from NH with foreclosure timeline info?
IndyMac/One West folks??

[unkelaaron]

thank you guys.
Any tips on the best way to find a good lawyer? This seems like the 1st step since I'm pretty scared about the ramifications of any decisions I make moving forward. Stopping payment on everything seems like that giant leap off the bridge.

[daylate]

welcome unk- use the search function on the forum to find all kind of good info on finding an attorney. Good luck with your journey.

[oregonpilot]

thank you guys.
Stopping payment on everything seems like that giant leap off the bridge.

WOW. i hear you there. Remembering back on that first missed payment. Paced back n forth watching the clock and saying, i can still make the payment. Having the cc web site up and seeing the click to make payment.
Had to actually leave the house to not make that payment.
I can feel myself tighten up just thinking back. heeding the advice from here to... STOP paying. Think that has been my biggest leap of faith in my whole (60 yr) life.
It gets MUCH better.
Good luck and welcome.

[StartinOver]

I'm in NH. We missed our first payment on August 1 2010 on our mortgage that is Freddie Mac, serviced by Sovereign. Around 5 days into October we received the Notice of Default. A few weeks to a month after that we got another letter indicating that they were running about 6 months out for Sheriff's Sale date.

In late December (I'm not at home where the files are at the moment) we got a letter for the attorney that Freddie Mac engaged to conduct the foreclosure. In mid to late January we received notice of the sale date for March 7. On Jan 27, I filed loan modification packages for the first and second with Sovereign. (The second is in their consumer loan division). Both packages are in review. Today the Loss Miti department said that they are running 4 - 6 weeks on reviews but mine would be quicker because of the sale date.

With New Hampshire being a non-judicial state, the banks can basically do whatever they want, within the time constraints of the graphic posted earlier in this thread. Mine is already taking longer than I would have predicted in a non-judicial state. We are not actually expecting a loan mod that will work for us, but I bought a little bit of time, while we prepare and file a BK7 with plans to surrender the home. I totally understand your desire to keep your family in your current primary residence. I have had an almost visceral connection to my home, in which I invested blood, sweat, tears and bit too much of the equity we pulled out in that damned HELOC, right before the big boom busted.

[unkelaaron]

Alright, we've made some big steps. Stopped paying mortgages and CC's in February. Although we could have stayed in our house longer, my wife chose the security of a nice place to live and a safe environment for our children, we did find a home to rent before my credit went from excellent to horsecrap. My wife has been on maternity leave since December, and long story short, is not going back to work. We are so tight on the means test, that each month, her past income has less and less of an impact. I am just very confused as to the affect our mortgage on our primary residence (which we left last week) and our rental property(which is vacant and we are giving up) vs. our rental payment on our lease will have on our means test. We were paying 2000 month on our 1st and 700 on our 2nd for our home. Now we rent for 2k/month
Is the best course of action to wait, let time go by so that my wife's former income no longer affects our means test, or file now. Does anyone have any advice for a very confused and tired guy right about now?

[StartinOver]

unkelaaron... I hear you on confused and on tired! As anxious as we all are to be over and done with this mess we have found ourselves in, I was advised by my attorney that unless we have a lawsuit or other adverse action being taken against us, there's really no big rush. You've accomplished some great things already as I see it - you have stable living quarters for your family and have set up a situation that allows for your wife to stay home and be deeply involved in what any thinking person must realize is the very noblest of endeavors - giving a healthy and loving start in life to the pride and joy of your lives - your children.

If you have not already begun interviewing attorneys it might be a very wise idea - particularly since you have both your own residence and an income property underwater to think about. I interviewed two attorneys, and the one I selected has been extremely helpful with answering questions by email (LOTS OF THEM) for several months before we actually retained him. I'm happy to pass along his contact info. I actually had two free consultations with him - first was many months premature for us to actually file but I was evaluating all the so-called options - debt management, efforts to refinance (ha!), debt settlement, etc. And of course, needed to consider that none of those might work and what did that actually mean? Nine months after that first consult, my husband and I went to meet with him, with all our financial data in a big file box and his recommendation was to attempt our loan mods first before filing.

My last post in this thread, we were looking at the 3rd time around trying for a mod. Got an offer, but it's clear now that we're so insolvent that even a modified loan is not sufficient. We're done, and now, since the bank has a sale date pushed out to May 9 (1 month, 9 days after first trial payment is due), so we're planning on filing the week prior to the sale date. In my new job, I just got a raise... fired off a note to the attorney about the amount and asked if that accelerated our filing date re: means test. Within 24 hours, answer came back - no effect.

Some of the other things that might affect decision on whether to file now or later - is there a rich relative in precarious health from whom you expect to have an inheritance? As mercenary as it sounds, the timing of your filing date and that individual's passing affect whether the BK trustee has any claim on the inheritance.

Is there any legal action or potential salary garnishment likely for you? (Since you only stopped paying in February on your mortgages and credit cards, I'd assume not.)

Are there any pending devastating medical conditions in the family for which you might incur large debts? If so, I'd think about delaying filing as long as possible, so that these might also be included in the bankruptcy. (That sounds mercenary, too, but it's not - if you file now, and then later incur some astronomical medical costs, you will be saddled with them for a huge lengthy time and they could capsize your new financial start. It's hard enough to go through this, and come out the other side with a fresh start - but if your fresh start is immediately compromised, that would be entirely tragic, I think.)