We went in with the intention that we are going to voluntary foreclose but did not realize that the mortgage company could come after us for years to come for the remainder of the money.
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Please help or give me some advice??
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LadyInTheRed is in the black!
Filed Chap 13 April 2010. Discharged May 2015.
$143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!
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I want to do a strategic default. I do have the $$$ to come even but only have $500 in the bank. We are tired of living in the home. Again worth $100k owe $155k. We want out and can go rent somewhere for the next 2,5,7 years or whatever it takes. There are homes that our double the size for the same as my mortgage.
I just don't know if I should file BK and I met with the lawyer and she is making it sound like this is my best option. I read so many different things and confused but feel that since I am 5 months behind and getting calls everyday, I better think pretty quickly here???
Please share any advice that you have?
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Originally posted by frank1010 View PostI read so many different things and confused but feel that since I am 5 months behind and getting calls everyday, I better think pretty quickly here???
Please share any advice that you have?
Consult with a couple more BK attorneys. They may have different advice then the first.
Would you still be considering bankruptcy if you weren't concerned about the mortgage deficiency? What is the size of your household? This is important in determining whether you may be able to do a Chap 7. There are people who have been told by one attorney that they should file a 13 and then another attorney gets them through a Chap 7.LadyInTheRed is in the black!
Filed Chap 13 April 2010. Discharged May 2015.
$143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!
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Would you still be considering bankruptcy if you weren't concerned about the mortgage deficiency? What is the size of your household? This is important in determining whether you may be able to do a Chap 7. There are people who have been told by one attorney that they should file a 13 and then another attorney gets them through a Chap 7.
Let's put it this way. before I went in to speak with the lawyer, no BK was on my mind at all. I just want to loose the house, go rent something nicer and not have the mortgage company ever come back on me. I don't think I need to do a BK. If i continue to save $1,500 month for the next few months, I will be fine. I can borrow approx $5k from a parent to help me out.
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If you file bk13 and give up your home, you will have to stay within the IRS standard for rent in your area based on family size. It looks like, depending on your county, it could be much lower than $1500/mo that you'd be allowed to spend on rent. Here is the link to look it up: http://www.justice.gov/ust/eo/bapcpa..._charts_IL.htm
You ARE allowed to continue to pay your mortgage payment if it is above the standard, but if you do not have a mortgage, you must adhere to the standard dollar amount--many people find these figures to be rather stingy.Filed Chapter 13 on 2-28-10. 341 completed 4/14/10. Confirmed 5/14/10. Lien strip granted 2/2/11
0% payback to unsecured creditors, 56 payments down, 4 to go....
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Originally posted by frank1010 View PostLet's put it this way. before I went in to speak with the lawyer, no BK was on my mind at all. I just want to loose the house, go rent something nicer and not have the mortgage company ever come back on me. I don't think I need to do a BK. If i continue to save $1,500 month for the next few months, I will be fine. I can borrow approx $5k from a parent to help me out.
That said, if you can handle your other debt, I suggest you talk to a couple more attorneys who have experience in foreclosure defense. Also, google "Illinois strategic default" or "Illinois mortgage deficiency". Take it with a grain of salt, but I found a couple of articles saying that banks often don't pursue a deficiency in IL. The fact that you have a 2nd could make the argument for BK stronger. There is no substitution for consultations with a few attorneys experienced in both BK and mortgage foreclosure defense.
My guess is that you would not qualify for a 7 with your family size and income, but do ask whatever attorneys you consult with about the possibility. When deciding whether to file a 13 don't forget to consider the following:
1. If you stop paying your mortgage and rent a home, can you pay off your dischargeable debt (25K in credit card debt) within 5 years without filing BK?
2. If you don't file BK and the banks write off the deficiencies and issue 1099s, what will your tax liability, if any, be on the forgiven debt?
3. If you try to avoid BK and a year or 2 from now after going through foreclosure you find out you have to file BK anyway because the banks are coming after you for deficiencies, will you regret that you would just be starting a 5 year Chap 13 when you could have already been 1 or 2 years into it?
Those are the major considerations I can think of for now. I'm sure I'm missing some.LadyInTheRed is in the black!
Filed Chap 13 April 2010. Discharged May 2015.
$143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!
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1. If you stop paying your mortgage and rent a home, can you pay off your dischargeable debt (25K in credit card debt) within 5 years without filing BK? I think so. If not in 5 years, pretty close to that.
2. If you don't file BK and the banks write off the deficiencies and issue 1099s, what will your tax liability, if any, be on the forgiven debt? Not sure of all this. I only would not my mortage and then do i NOT or do I pay the $200 a month home equity line of credit?? not sure.
3. If you try to avoid BK and a year or 2 from now after going through foreclosure you find out you have to file BK anyway because the banks are coming after you for deficiencies, will you regret that you would just be starting a 5 year Chap 13 when you could have already been 1 or 2 years into it? What kind of amount will these deficiencies be?? Can't I pay a percentage or pay so much per month??
There's got to be a way to get by doing all this if others are doing it. I just want to go rent something bigger and get out of the house that I will never see another dollar on. Just not sure how to do it all.
If I short sale, can the mortage company still come after me???
What's a deed in lieu of foreclosure?
It's been 5 months of unpaid mortage, do I pick up the phone when they call and talk to them, what do I tell them??
Should I start taking my money out of the bank?
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