Thank you for the clarification:
I'd like to stay in this house. I don't know how to do that and have resorted to trying to short sell it. So, will chapter 13 allow me to stay here?
Response 1: Only if you can afford to make the regular mortgage payments and pay the mortgage arrearages through your Chapter 13 plan. If you do not have any money to fund the Chapter 13 plan, then Chapter 13 would be just a very temporary situation to stop the foreclosure sale. Then if you fail to make the mortgage payments, the lender would file Motion for Relief from the Automatic Stay for permission from the Bankruptcy Court to proceed with the foreclosure.
You may be able to file a Chapter 13 if you have disposable income--extra income after your necessary expenses every month to fund a Chapter 13 plan and you must also meet the debt limit requirement. You may able to file for Chapter 13 if your unsecured debts are less than $360,475.00 and secured debts are less than $1,081,400.00. In Chapter 13, you prepare a payment plan and make payments to your creditors on 3 or 5-year plan. If your income is equal to or less than the current income guidelines for your household size in your state, you would do a 3 year plan. However, if your income is more than the current income guidelines for your household size in your state, you would do a 5 year plan.
The filing fee for a Chapter 13 is $274.00
These are the current income guidelines for the Commonwealth of Massachusetts:
Household of one person $53,315.00
Household of two persons $69,204.00
Household of three persons $82,297.00
Household of four persons $99,293.00
Add $7,500.00 for additional individual
You must receive budget and credit counseling from an approved credit counseling agency within 180 days before your bankruptcy case is filed. This means that if you are filing your bankruptcy case on Monday, you need to do the credit counseling on Sunday, the day before, not on Monday the day that you are filing for bankruptcy relief, and if you are filing your bankruptcy on Tuesday, you need to do your credit counseling by Monday and not on Tuesday, which is the day that you are for the bankruptcy relief. You cannot do the credit counseling the same day that you are filing for bankruptcy protection. The agency will review possible options available to you in credit counseling and assist you in reviewing your budget. Different agencies provide the counseling in-person, by telephone, or over the Internet.
It is usually a good idea for you to meet with an attorney before you receive the required credit counseling. Unlike a credit counselor, who cannot give legal advice, an attorney can provide counseling on whether bankruptcy is the best option. If bankruptcy is not the right answer for you, a good attorney will offer a range of other suggestions. The attorney can also provide you with a list of approved credit counseling agencies, or you can check the website for the United States Trustee Program office at http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm
After your case is filed, you must complete an approved course in personal finances. This course will take approximately two hours to complete. Your attorney can give you a list of organizations that provide approved courses, or you can check the website for the United States Trustee Program office at http://www.usdoj.gov/ust/eo/bapcpa/ccde/de_approved.htm
Consult a local bankruptcy attorney for further explanations of your rights and responsibilities.
The sites below are good resources for finding bankruptcy attorneys in your area:
If you cannot afford an attorney, then the next best alternative will be to use bankruptcy petition preparer. Bankruptcy petition preparers prepare bankruptcy forms but they cannot give you legal advice because they are not attorneys. Click on the links below for some of the bankruptcy petition preparers. You can do some searches on Google or Yahoo if you do not like the ones on the links below.
And I guess I was asking if there is a way to have someone buy the house and allow us to rent it.
Response 2: Unfortunately, this may not be possible. Also, when this has been done, it has not quite worked out for the better for the former homeowner. The people that buy the house under this arrangement usually do not keep their part of the agreement and would oftentimes sell the property to another investor who may not want to rent to you, the former owner. I quite understand that desperate times call for desperate measures, but this is a desperate measure that you would to stay far and away from. This arrangement would make your situation worse instead of better.