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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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This question is three fold: 1) My wife and I make about

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This question is three fold:

1) My wife and I make about $70k a year combined, we have no kids and live in Florida. We exceed the AMI and are unsure of our BK options. We don't have a lot of debt, two cars that are worth more than we owe, no credit cards, but we have a house we bought in 2008 that we owe $510k on that is worth about $200k. Are we able to file Chap 7 even though we make more?

2) If we are unable to file Chap 7, is ther another way (a different type of BK to file) for us to deal with this property?

3) We have been trying to get a loan mod for months, now we find out there is a sale date on our home at the end of the month. Will filing Chap 7, 11, 13, etc, postpone the sale date?

cfortunato :

Hi - my name is XXXXX XXXXX I'm a Bankruptcy attorney here to assist you.

cfortunato :

1) What is the source of your income and your wife's income (employment, pension, etc.)?

cfortunato :

2) Do you or your wife provide support for anyone outside your household?

cfortunato :

3) Do you or your wife have extraordinary ongoing medical bills?

Customer:

Regular wages is the source of our income... we are in our 20s. We do not support anyone else, nor do we have any outstanding medical bills.

Customer:

My brother convinced me to be the primary borrower on a home that we bought together in 2008. It's in foreclosure, with a sale date looming at the end of the month.

Customer:

I know if I don't do something (which I have been trying), I will end up with a judgment.

cfortunato :

Thank you for your response.

Customer:

We also have been in negotiations with the bank for months and just found out the sale date is Nov 30th and we have no where else to go.

cfortunato :

1) Given the information you provided, you would not be able to file a Chapter 7, but should be able to file a Chapter 13.

cfortunato :

2) Yes - you should be able to file a Chapter 13. The difference between the 2 is with a Chapter 7 you pay nothing to have your debts discharged, and with a Chapter 13 you have to pay all disposable income to the Bankruptcy court for 5 years. At the end of 5 years, your debts are discharged.

Customer:

We don't have any debts, just the mortgage.

cfortunato :

3) Yes - filing any Bankruptcy will postpone a foreclosure sale date.

Customer:

I would have perfect credit if it weren't for this mortgage...

cfortunato :

The balance of the mortgage would be discharged at the end of 5 years.

Customer:

But every dollar I make will go to paying down the balance?

cfortunato :

No - not every dollar. You would be allowed to deduct your reasonable everyday expenses. Whatever is left over (basically, the money you do not need) goes to the Bankruptcy court.

Customer:

To pay the mortgage?

Customer:

So I'll lose the house, but continue to pay on it?

cfortunato :

Yes - if that is your only debt.

cfortunato :

You will be given the option, if you want, to pay the mortgage arrears over 5 years, in addition to the regular mortgage payment. Do you want to keep the house?

Customer:

No.

Customer:

Well, yes, but I'd rather get rid of it and not have a foreclosure/judgment than stay. If I can file Chap 13 and get rid of it and NOT have to pay for it, that'd be ideal.

cfortunato :

Then you would be paying all disposable income to the mortgage company for 5 years. This will avoid a judgment, and the balance of the mortgage that is still owed at the end of 5 years will be discharged.

cfortunato :

That is how a Chapter 13 works.

Customer:

Is that my only option in regards XXXXX XXXXX the debt?

cfortunato :

The only way to discharge debt is to file a Bankruptcy. There is no other option available o have debt discharged.

Customer:

Can I file BK to stay the sale and then not follow through?

Customer:

And if I do file but dont have it discharged, am I allowed to file later if I want?

cfortunato :

Yes - may homeowners file a Bankruptcy just to postpone a foreclosure sale, and then have the case dismissed.

cfortunato :

If you file a Bankruptcy, and the Bankruptcy is dismissed, you can file another one after 180 days.

Customer:

Ok. That's what I was looking for.... thank you!

cfortunato :

You're welcome!

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