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Ask WALLSTREETESQ Your Own Question
Category: Bankruptcy Law
Satisfied Customers: 17252
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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My home is in foreclosure and the sale date is November 24th.

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My home is in foreclosure and the sale date is November 24th. I have been struggling with the bank to let me keep my home through 3 modification agreement applications and periods of payments (all made on time) until the modification was declined until I applied again.
I bought the home 11 years ago, I sold it to my Mom 5 years ago because her credit got us better interest rate and she moved in to help take care of me as I came down with a dibilitating bone disease that left me bedridden (I'm about 70 percent back to who I was which is huge improvement). At any rate my mother put my name on the title of the home about 6 months before she passed away in August of 2009.
My fiance (of 11 years) and I can afford to make payments if the bank would be willing to adjust the principal (house underwater) and/or change the interest rate.
I spoke to a Real Estate Attorney about my problem with the knowledge that our goal is to keep the house even with no equity, and he suggested I look into chapter 13.
I certainly have unsecured debts and tax bills deemed "uncollectable" with my disibility I am on Social Security Disability after 15 years of earning over 100K (160K the last two years) as a software programmer. I never planned for a severe illness that would turn my life completely upside down. However my fiance earns a good salary (and we have a tenant) and that's how we could afford to make house payments on a modified loan if the bank were willing.

Trying to give you some history without bogging you down with irrelavent details. Please let me know if you have any questions.

My question to you is How would Chapter 13 help me to keep the home? Can you enlighten me on how that would work if it would and if I have enough time to do so with the home's sale date being the 24th of this month. OR do you think that now that my mother has passed away, I might be able to stop the sale date by applying for another home loan modification in MY NAME since all the previous ones were in my Mother's name?

Thanks in advance for your advice, Monica

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.


A chapter 13 would force the bank to stop the foreclosure, and allow you to pay any arrears over a 60 month payment plan, as well as reducing your credit card debt by 80-90%. The modification should be tried however, to guarantee the foreclosure is stopped a bankruptcy should be filed atleast two to three days prior to the sale date.


In my experience a modification takes time and certainly more time than 3 weeks to be approved.

Customer: replied 6 years ago.

Thank you for the information about what Chapter 13 would do. I assume I would not only have to prove I can make the payments on the arrearages, but also make the payment I've been trying so hard to get changed through principal reduction to something closer to actual current value and/or interest rate reduction.

I don't suppose any of that could be worked into the Chapter 13 deal???

Otherwise I would not be able to afford the arreages payment AND the inflated mortgage payment (we maxed out the mortgage to help with down payment on a different home thinking this house would sell quickly - unfortunately did not sell after a year of paying 2 mortgages then I got sick, etc...).

I will certainly try to get them to agree to another home modification application - that alone stops the sale date (at least it did the last two times), and buys us time to do all the paperwork for the modification application and then my experience has been they put us on a payment plan while they take many months to assess the application. I was hoping that since this time the application is coming from me and the deceased, that they would give me a chance to see if I qualify for the modification.


Another question rises from this...the last two times we did the modification application to stop the sale date, I used my lawyer RE lawyer who I've spent 12K on. Do you think this is something I should be able to negotiate myself since I know the ins and outs of what happened before, or do I need to hire a lawyer to negotiate them stopping the sale date to reconsider another modification application? There are so many companies/law offices that advertise they will do this for you, while the banks claim not to be taken advantage of by attorneys advertising this service as it is not needed. What do you think?


Ideally I'd like the BK attorney to do both - get a loan modification and a Chapter13. But I get the feeling a BK attorney won't touch negotiating with the bank about a loan modification to stay the sale date, right?


Thanks again for your responses in advance.


I would file a chapter 13 case just to stop the sale, and even if you do not go through witht e bankruptcy you stop the sale for 3-6 months, which may give you enough time to modify the loans. I would do this, as a modification will take time.
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