Question chapter 7 discharged followed by chapter13

[jennifer8173]

hi everyone,
i filed chapter 7 in nov.2010 received discharge in apr.2011. since then our mortgage reset due to increase property tax and insurance so we are now 5 months behind. we are currently working with wells fargo/asc since may 2011 for the hamp but not sure of the outcome. we did reaffirm our mortgage. wells told me at the the end of the process they just needed the bpo which came in on friday but i then had to update my financials, hardship, paystubs, bank statements, etc. i never had to send them the bank statements before so this was something new for me, not sure what they look for, i hope i dont get denied for certain items on the bank statement. im hoping all goes well but i want to be prepared in case they deny me. could i file a chapter 13 on the five months and get on a payment plan? i realize that you have to pay your current mortgage plus the plan thru the trustee. im in florida, i know bk rules vary state to state. thanks for your advice

[Pandora]

welcome to the forums, search around and you'll learn quite a bit.

You filed Ch. 7 and reaffirmed your mortgage but have fallen behind - ouch; that means you are on the hook for the entire amount and cannot walk away. As to the Ch. 13, could you file? Yes.. you could, you wouldnt be eligible for a discharge however (but you wouldnt need one if only for arrears), however the bigger question is why would you file Ch. 13? I understand to pay your arrears, but look at it this way: if you can afford to pay the arrears through a Ch. 13, plus attorney fees and trustee fees - then why not just set up an arrangement with the lender to pay them directly? You'll save alot of money that way.

If you can afford a CH. 13 of arrears, lawyer, trustee fees in addition to your regular mortgage payment, then you should be able to catch up any arrears you have currently. Your bigger issue is that you reaffirmed.... what reason did you do so?

[sh9730]

Pandora,

Your approach only works of course if the lender WILL work with the OP. No guarantee by any stretch.

But this is a good example of why reaffirming a mortgage comes with risk. In my state, less risk, since we are not a deficiency state, but still Im not reaffirming my mortgage even if I could (which I cant since Im not current).

[sunshinepa]

Most lenders today do not want properties, they are overwhelmed with foreclosures in this country. I cannot imagine a lender would not work with somebody to bring the payments up to date.

I would attempt to work with them for payments to "catch up". Another BK does not make sense to me unless the lender absolutely will not work with you.

[sh9730]

I completely agree the OP should TRY and either get a loan mod or repayment plan. But, there are PLENTY of stories out there on other forums where it makes no sense for the banks to not enter into the deal with the borrower (i.e. "just adds another property to their list"), but they do it none the less! They use this calculation called "Net Present Value" where they compute the benefits/risks of keeping someone in the property and being paid vs getting the money in a FC sale and reinvesting it etc....

Its never a given....but again, the OP should definetely TRY and do what they can....

[Pandora]

agree with you sh9730 - it will only work if the lender agrees to work with the OP on repayment vs. forced to in a CH. 13.

I was viewing it from a monetary standpoint in that if the OP had the money to pay arrears vs. paying a Ch. 13 plus fees, then they should try that route first and foremost as it would be cheaper in the long run. Think of it this way - if you could arrange payments on arrears for 6 mos - 1 year, thats 30 - 50 months less than a Ch. 13 would be!

If all else fails and there is no work out with the lender - then yes, Ch. 13 would be your final trigger pull - but again you have to ensure you can afford it all the way through.