This is related to bankruptcy and real estate. I live in Utah am a year behind on a home whose loan is more than the value of the home. As of Sept 19 they can set a sale date no sooner than 30 days from that date.
The following have offered to help me keep my home even though a foreclosure sale date may be set as soon as a month from now. I must select one of these or consider other options you may recommend:
1) A bankruptcy law firm (Utah): They say filing Ch. 13 or 7 will stop the foreclosure process (is this true?), and the attorney will work out a new payment schedule. Estimated cost $2500 plus filing fees.
2) A modification review group: They assign a case manager to help me prepare a loan modification
package at no charge. Then they refer me to an FTC approved law firm Butler & Associates (in New York) who I pay a retainer and they will interface with my lender. If I am denied a loan mod, they will try to negotiate better terms; if that is not successful, they will advise bankruptcy to try to keep the house. It is a 3-phase process, and I pay about $1000 as each phase is completed (excluding cost of bankruptcy if that becomes necessary.
3) A HUD approved non-profit agency (Utah): They are local and will meet with me once all documents are received. They will turn in the modification application to the lender. I don't know if they will negotiate with the lender should my app be denied.
I need to understand whether my filing bankruptcy now hurts or helps my chances to be approved for a loan modification. I have $30M in unsecured debt. I make $64M/year with current house payments of $1500/month. My single mortgage is for $217M at 8%. I heard a loan mod usually results in a house payment of 31% of gross.
What do you think is the best course of action?