Just don't know what to do

[bshaw96]

It feels as though our family has made a career out of bankruptcy. Before anyone flames us, let me clarify. We had a successful Chapter 13 discharge in 2004. That chapter 13 was pretty much the result of being young and stupid. We bought our first home in 2005. My husband got sick and was out of work for a year. We lost our insurance. ARM adjusted. Typical sad luck story. We were forced to file another Chapter 13 in 2006. We managed to make the insanely high payments until 2008 when we got behind and were dismissed. We immediately refilled 30 days later. No new debt just the previous stuff. During this time, because of the high trustee payment, we got behind on our mortgage in 2011.As that was the main thing we were trying to protect, we allowed the Chapter 13 to voluntarily dismiss in 2011. Common logic may reason we should have let the house go. Or convert to 7. We looked into that option. But caught up, our mortgage payment is only 775/mth for a 2000 sq ft 4 bedroom home. The cheapest rent in our area is 1100/mth and we are not picky. Anyway, the point of this. We vowed we would NEVER file again. We have done well staying afloat. But the forebearancecagreement payment is killing us. We pay 1395/mth. For 10 more months. Because the bankruptcy was dismissed, all the creditors are harassing us again ( including 2 cars we surrendered). Our main focus has been on repairing our credit . But it seems like a losing battle. Because of the forebearancecagreement it looks like we are continuously 120 days behind and our scores aren't much over 500. It's tore up desire paying all our current bills on time and having no new debt. We truly truly learned our lessons, but I don't know how to recover from this credit wise and stop all the harrassment calls. Most of it is unsecured credit card debt slated to fall off in a couple of years. The main hit to our score is the mortgage which won't even report current until May 2013. Should we just revile to clean up this mess or just ride out the credit storm? I figure either way our credit is tanked. It's just frustrating bc none of it is new debt, just the same old debt from our 2006 filing following us around It's not even about monthly affordable at this point. It's about the best way to rebuild our life and credit. We are not in danger of losing anything we haven't already lost. Just fill like after a year trying to crawl out from under our previous mess, we are making no progress.

[bshaw96]

Re file* (not revile)
Feel (not fill)

Sorry. Sent this from my phone.

[tobee43]

wow, it really sounds like you have been through the mill.

i think the fact you mentioned considering converting your case into a 7 may have said it all. although, one can't take back what is already done.

But the forebearancecagreement payment is killing us. We pay 1395/mth

can't you get this lowered if you meet the mark. i think this is why chapter 13's scare people so much. the payments are out of balance many times and people get behind. although, on this forum there are many success stories with 13's working just fine. i have also seem many who's payments have been put so high they were bond to fail.

is there anyway you can get that payment lowered. also about your credit, really time is the only thing that can heal that...and you keeping on top of the credit reporting agencies.

best of luck and i hop everything works out for you and yours.

[Pjmax]

I am a newbie, and I have no technical legal advice to offer, so what I am about to tell you is just based on what I'm reading here and your previous posts.

If you truly want to get out from under this mess, I think before undertaking any more attempts at quick, temporary legal fixes, you should consider some serious debt counseling, budget management courses, etc. It just appears to me that there may be some underlying issues that need some work.

Maybe the experts will correct me if my impressions are wrong, but setting up another plan just to avoid harrassment, isn't going to help if you can't stick with it.

[tobee43]

i personally no of no one who has benefited from debt counseling other than the company dishing out what is using unhelpful information. i'm not saying someone somewhere in this world has not been helped by one of those places, but they are far and few between.

you can't manage anything unless there is enough to budget and manage and that's usually the first mistake. unreasonable amounts that can't be reached are put into a payment plan and are soon found to difficult or impossible to reach and therefore one find themselves in this situation.

when a 13 is figured one's atty should make certain in one's best interest that they can actually afford not to fail. i'm not really clear as to the exact reasons why the Op finds themselves in this situation over and over, however, if the payments were set to high to begin with that's going to be the beginning of a failed attempted at the resolve in the long term.

one needs a realistic financial plan, one that can be lived with no matter what. a plan will work if set up correctly. as i have mentioned before, there are many success stories on this forum with people who have completed their 13s.

[Pjmax]

My apologies if my comments seemed harsh. My heart truly goes out to you Bshaw.

Tobee I totally agree with everything you've said, (your advice is sound and gracious as always) particularly about having a realistic plan. I'm just wondering if the OP doesn't need help in determining what is realistic, and when circumstances change, how to make adjustments (either in the plan or lifestyle) before the issues compound themselves.

I also wasn't referring to commercial debt counseling.

[bshaw96]

My apologies if my comments seemed harsh. My heart truly goes out to you Bshaw.

Tobee I totally agree with everything you've said, (your advice is sound and gracious as always) particularly about having a realistic plan. I'm just wondering if the OP doesn't need help in determining what is realistic, and when circumstances change, how to make adjustments (either in the plan or lifestyle) before the issues compound themselves.

I also wasn't referring to commercial debt counseling.

Trust me. I'm not offended. You pretty much lose all pride when you file bankruptcy 3 times. As I said, this is not new debt. And while I am not trying to make excuses, I really do not feel at this time there are underlying issues. Truth be told, I am darn proud of us. Since 2006, we have been advised it would be dang near impossible to keep our home. We are with an extremely shady loan servicer (SPS) that has tried to make that happen. Our lawyer in our last 13 completely lied to us about how our mortgage was included in the plan causing a major nightmare when dismissed. I assure you. After the last dismissal, we were ready to walk away. We started looking rentals. For 3 months we looked rentals. The cheapest rent was 1100.00. 300.00 more than our mortgage normally. We have been denied modification. We sure can't refi with our credit. Walking away would not save us money. The only new debt we acquired was a small 13,000 car because we surrendered our others. Luckily my hubby drives his patrol car to and from work. We pretty much have 1 car with 2 kids. He has picked up extra shifts. I work overtime. We have no luxuries. Rarely get a vacation. I have planned a budget for the next 12 months counting every penny. We are trying to build our savings. I simply don't know what more I could do. When we went into our 2nd 13, ouronthly bills went UP 300.00. With the re file, they went up another 100.00 plus our house payment almost doubled. That's why we ultimately let the last one go. Again, we are not drowning or anything now. We are actually better than before with disposable income. It's just the constant phone calls. Not sure any budgeting or counseling would fix that. Just at a loss. Guess all we can do is use caller ID, keep paying our car payment on time, and ride it out. Thanks everyone.

[Pjmax]

I am also a member of the 'pride out the window' club, so I'm with you on that.

Have you consulted with any attorneys recently?

[ValleYum]

Jumping in here and this is just my immediate impression:

File a Chapter 7. (Are you eligible?)
If, so:
Reaffirm your car.
Do NOT reaffirm the mortgage - but keep paying the $1395 per month forbearance for 10 months. After the 10 months, would your mortgage be back to $775? -OR- the company may give you a better (cheaper) modification post Chapter 7 knowing you could just walk away. By not reaffirming the mortgage, you are off the hook if something unexpected happened or you needed to move - you wouldn't be responsible financially for the house anymore.

A BK 7 would rid you of all most other bills other than those like student loans, taxes, etc.

Would this help your family get a true "Fresh Start"?

{{{Hugs}}}

[LadyInTheRed]

bshaw96, an earlier post said you weren't eligible for a Chap 7. Is that still the case?

Is the forbearance agreement on your first mortgage or 2nd mortgage? Could your second mortgage be stripped in a Chap 13? What is the value of your house? What are the balances due on your first and 2nd mortgages, including all late fees and penalties?

The goal to clean up your credit seems premature. You still have debt you need to deal with. Getting that taken care of is more important than a credit rating. I know you don't want to file another BK, but it sounds like either filing a Chap 7 or filing a new 13 and finishing it may be your best bet so that you get your debt discharged and have a true fresh start. Even if you do finish the forbearance agreement, you will still have creditors coming after you. As long as you have unpaid creditors out there, you can never be sure that your phone will stop ringing, even if the debts can no longer be reported on your credit reports. Even if statute of limitations expire on all of your debt, creditors can still sue you and force you to file an answer to allege that the statute of limitations has expired.

It sounds like the problem with your prior Chap 13 was not that you can't afford current mortgage payments, but that you can't afford the payments on the arrears. It may be that you need to give up the house, file a Chap 13, live in your house rent free for as long as you can and then rent a house until you can save enough money for a down payment and qualify for a loan to buy another house 2 or more years after your discharge.
Is it possible that you have paid enough on the forbearance agreement that a Chap 13 payment including the remaining arrears would be more manageable now? I suggest you consult with a few bankruptcy attorneys and discuss what a new Chap 13 would like like for you, both keeping the house and letting it go. You learned from your prior 13 that you need to make sure you understand your plan and what is and is not included. This should help you know the right questions to ask attorneys. A good attorney should be able to help you determine whether you can afford to keep your home and then get you into a livable Chap 13.

[tobee43]

My apologies if my comments seemed harsh. My heart truly goes out to you Bshaw.

Tobee I totally agree with everything you've said, (your advice is sound and gracious as always) particularly about having a realistic plan. I'm just wondering if the OP doesn't need help in determining what is realistic, and when circumstances change, how to make adjustments (either in the plan or lifestyle) before the issues compound themselves.

I also wasn't referring to commercial debt counseling.

i didn't think you were harsh at all and as far as my advise, if i could type maybe it could or would be useful to some LOL!!!

yes, you are correct, if one can't tell or see what is truly realistic to begin with, there is going to be problems going down the road. a map to a disaster!

[bshaw96]

bshaw96, an earlier post said you weren't eligible for a Chap 7. Is that still the case?

Is the forbearance agreement on your first mortgage or 2nd mortgage? Could your second mortgage be stripped in a Chap 13? What is the value of your house? What are the balances due on your first and 2nd mortgages, including all late fees and penalties?

The goal to clean up your credit seems premature. You still have debt you need to deal with. Getting that taken care of is more important than a credit rating. I know you don't want to file another BK, but it sounds like either filing a Chap 7 or filing a new 13 and finishing it may be your best bet so that you get your debt discharged and have a true fresh start. Even if you do finish the forbearance agreement, you will still have creditors coming after you. As long as you have unpaid creditors out there, you can never be sure that your phone will stop ringing, even if the debts can no longer be reported on your credit reports. Even if statute of limitations expire on all of your debt, creditors can still sue you and force you to file an answer to allege that the statute of limitations has expired.

It sounds like the problem with your prior Chap 13 was not that you can't afford current mortgage payments, but that you can't afford the payments on the arrears. It may be that you need to give up the house, file a Chap 13, live in your house rent free for as long as you can and then rent a house until you can save enough money for a down payment and qualify for a loan to buy another house 2 or more years after your discharge.
Is it possible that you have paid enough on the forbearance agreement that a Chap 13 payment including the remaining arrears would be more manageable now? I suggest you consult with a few bankruptcy attorneys and discuss what a new Chap 13 would like like for you, both keeping the house and letting it go. You learned from your prior 13 that you need to make sure you understand your plan and what is and is not included. This should help you know the right questions to ask attorneys. A good attorney should be able to help you determine whether you can afford to keep your home and then get you into a livable Chap 13.

We are on the threshold of qualifying for Ch 7. We actually make more now so it may be harder. We are not underwater. Actually have 15,000 equity. We owe 150,000. Valued at 165,000. Forebearancecagreement on 1st. 2nd charged off and they offered to settle for 6000 but we didn't have it. We were hoping to approach that again when our first was caught up.

I'm not sure what renting until we can buy again would help? In 8 months, when our forebearancecagreement is done, our house payment would go down 650.00 and it's our house. If we rent it would indefinitely be what our forebearancecagreement payment is now only it wouldn't be ours? I'd have no problem surrendering it if it would save money, but it would actually cost more to rent.

[bshaw96]

Again, thanks everyone. My op was mostly out of frustration after I saw our credit report knowing how hard we are working. We will do what we have been doing 6 years. Plugging away as best we can.