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Very valuable information, thank you! I received notice of sale date today to occur oct 19 at auction.
I was told I could on my own do only a petition for bankruptcy (just to obtain a case number XXXXX not actually file) and the mortgage lender would have to postpone the foreclosure process during which time I could apply for one of their loan mod packages. They said once the loan mod review process starts they are not allowed to foreclosure on the house. Does this sound right?
What you are saying is slightly different: Actually file for ch. 13 then work with the lender to restructure payments as part of that process which is more like an inhouse loan modification, is that correct? This makes sense to me because it reduces monthly payment obligations to my unsecured debtors which is considerable about 30M. One bankruptcy firm said they could include working with the lender and another one said they would not try to negotiate with them.
Loan mod only: I am about to retain services of an out of state law firm, at this point working with an agency that gives them referrals and they seem quite knowledgeable. They sent me documents which claim they will negotiate a modified mortage payment, repayment plan, forbearance or reduction of the principal of my loan. cost is over $3000 but in phases only as services are actually rendered and I may cancel at any time. I have not seen negative reviews for them but hope I am making the right decision. If I follow your guidelines, I may not need them.
Roger, thank you for your response! I have concerns re information I received yesterday.
A local attorney said she could file a CH 13, eliminate all my unsecured debt which would be great. For my house, however, she said I would resume regular payments plus pay back the amount in arrears (23,000) spread out over 60 months. This brings my house payments to 2000 and my take home is 3000. She did not mention negotiating on my behalf with the lender. She said then I could pursue a loan mod on my own over the next year or so.
What you said sounds a lot better. Maybe I should look for another lawyer who can negotiate better mortgage payments as you suggest?
Also, do you think we have a chance at keeping my husband's motorcycle? We are making payments but could pay it off with our last tax refund. I am worried they consider it a luxury, but the fact is we have one working car which I drive to work and my husbands work truck gets 7 miles to the gallon. He needs to bike for economical transportation for work or to apply for work. That brings up another point, he has been too sick to work, but if he can get part time work after ch 13, can we keep his pay? Or if my pay goes up or down does that change our payment arrangements approved under ch 13?
I'd appreciate a prompt reply. I just received notice we have to be prepared to vacate our premises by Oct 20, one day after the house goes up for auction, asking price $20,000.
You should consult the attorney again about what exactly has to be paid during the 5 year term. It's likely that there was just a miscommunication. You're not expected to pay off the entire mortgage in 5 years. Instead, you pay the arrearage during that time and then pay the mortgage as agreed between you and the lender - - usually this can include an extension of the term up to a 30, 40 year note.
If you file a chapter 13 and can prove that you can afford to make the motorcycle payments, you should be able to keep it.
Please let me know if you need anything further. Thanks.
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