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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2815
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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Customer Question

WE HAVE 1ST MORTGAGE (Chevy Chase) AND $210K on HELOC AS SECOND MORTGAGE (JP Morgan Chase). We were in defult payment for more 12 months. OUr a Short sale profeccional got approval from 1st mortgage and it is good. But JP Morgan Chase sold to collection agency (Oxford Management Services) our HELOC, and Collection agancy get approval with following terms:
1) buyer will pay $75K on closing and buyer agreed
2) sum $170K (more than we had originaly) they will continue try to collect from us. We don't have money to pay these amount.

At same time on May 14 should be action to sell house on foreclosure. Could we stop short sale, and go with foreclosure and later file Charter 13 on $230K or beter choice is to finish closing with shortsale and later file bankruptcy? Is there hope that file charter 13 can remove all $230K or $170K?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 6 years ago.
Hi and thank you for your question.
If you file chapter 7 and the debt will be discharged for all mortgages if you are surrendering the home. A foreclosure will follow shortly thereafter to transfer title, and that would be it. If you need to do chapter 13, you can try to surrender the home in full satisfaction of the total claims (no default left after foreclosure). If that plan gets approved, the debt will be discharged in the chapter 13 completely, and they will move to foreclose to transfer title. In some cases, the court will allow the deficiency balance to be paid thru your case for the balances left after sale, at the unsecured creditor rate (10%-100% depending on your plan). At this point you should meet with a local bankruptcy attorney to review your case options and set you up with the best available plan. Most will offer free consultations. Thanks for your question, and good luck.
Customer: replied 6 years ago.


Thank you very much Terry for respond

1) what means the phrase:" can try to surrender the home in FULL SATISFACTION of total claims (no default left after foreclosure)..."

2) we think that we can go only with chapter 13, because we have some assets.

3) our original question was, because we did not satisfy with Approval from Oxford Management Services collection on SS on second mortgage (they want to take $75K from shortsale buyer on closing, it is OK, and remaining balance $170K will continue try to collect from us, that is not OK, even we are sure that they bought this loan on penny on dollar, but will get already 35% of 100% balance).


In this case, if our SS agent cannot figure out agreement without forgiveness remain balance, and we anyway need to file bankruptcy, why we need to leave house tomorrow signed shortsale, while we can wait one more week, go on foreclosure and stay in this house 20-30 days more after foreclosure. I need to know your expertise:

Do I have ability not sign shortsale in Escrow tomorrow and wait foreclosure?

If yes, what I should do? (Shortsale buyer is asking to leave property and sign purchase and sale agreement or HUD1?)

Could I postpone filing bankruptcy after foreclosure two-four months letter?