Motion for Relief from Stay: Real Property

[TeacherMomma]

Ok, so we do want to keep our house.
We included it in the Ch 7, and prior to the BK were on time every month. Our lender told us (when ever we would call regarding a modification. We would write letters and call and that is what we were told everytime) that we had to be at least 3 months behind for them to work on the loan. SO - we have been making partial payments since May. That was at the advice of an atty we consulted with, as he said we did not want to make NO payment since we were not reaffirming the house, and we wanted to reaff on a lower amount, or if they would not do that we would technically be riding it out.
The lender filed a relief from the stay today, and I am wondering - do I need to respond? Do I need to attend? The documents they filed state NO payment has been made, yet they are cashed and show on our statement of being in a suspense account, so that is not entirely true.
I am just wondering what I need to do - if they don't work with us on the principal balance of the house, we WILL walk, but would rather not.

[StartingOver08]

Well, the suspense account is just that - in suspense and NOT applied to your account. The servicers love suspense accounts. They are the worst possible thing for you because you have given up the money and yet not had the funds applied to the outstanding payments.

So technically the attorney that wrote you have not made any payments is correct - because none of the payments you have made have been applied. If you decide to walk, that money will get applied to fees.

[TeacherMomma]

Thanks for the response.
So in the wake of this - what is the best thing to do? Pay partial again (which seems dumb now since the are more than likely going to get granted the relief, and start foreclosure which is what is going to have to happen for them to modify), or pay nothing and let it go a month of nothing since we technically need them to get an NOD/start foreclosure to get it modified (per their CS reps).

Do I need to file a response to this? Do I need to attend the court date? (since I am pretty sure they will get the relief they seek, I don't see why I should). I assume since there is a court date and at present no atty fees are listed, that they will tack those on after this takes place?

[StartingOver08]

Don't pay partial payments. They do nothing for you - they only help the servicer.

What happens if they don't modify your loan? Are you prepared to walk? If the house is upside down, then because you have filed, you are in good shape. Don't make anymore payments unless the modification they come up with suits your needs. Otherwise just keep your money, save up to move somewhere else when the foreclosure is finished. It has been taking a long time to foreclose - use that time wisely to save your funds.

As to the attorney fees - yes, the banks add on tons of fees during the entire process. If you surrender the house in BK, you are not responsible for those fees.

[TeacherMomma]

Yes, if the mod isn't what we want we will walk.

So, we stop paying, let them get the stay lifted (as that is the only wayto move forward with a possible mod, since they will not speak to us with the stay in place), and if it works out great - if not we walk. Now, with that said, if we walk, and they have their stay granted - how are we any different than the non BK people walking away from homes? Can we be sued, or charged more fees - or we just walk away since we did not reaffirm?

[HHM]

In a 7 it won't matter too much. When you get your discharge in another month the stay will be lifted anyway.

[TeacherMomma]

HHM then is your opinion that I should attend the hearing? File a response (if that is even something that is customary)?.
We are waiting on the UST to file a motion to dismiss or convert, so the discharge won't really be in a month, we doubt.

[HHM]

If you are facing a possible dismissal or conversion, then you probably should file a response (Objection to Creditors Motion for Relief from Stay).

[TeacherMomma]

Thank you.
The UST has until early next week to file whatever he is going to file - so I will see if he files for dismissal/conversion or removes his presumption (yeah right) and file an objection accordingly.
Anyone know the timeframe I have to have the objection in? (the hearing is set for 8/26)

[2manybills]

On the U.S. Central District Bankruptcy Court website, there are forms under the LR 4001 series. There is a form response there that you can file with the court and serve on the parties. I read through the rules and can't find anything that lists when it has to be filed, but the form itself is pretty easy to fill out.

Let me know by PM if you need the link.