If I declare Bankruptcy

[Winterfield]

Hi everyone,
I working with Litton Loan and Chase on my second I have a trail mod going with chase , but nothing with Litton. I am upside down on my house by 40% If I declare Bankruptcy (which i will have to do soon) should i try to wait for Litton to get bank to me? what would happen with second with chase? Would they stop working with me and make reaffirm the debt. I would like to keep my house. Any help would be great.

[PCBFL]

We were in a similar situation but 1st with Wachovia, 2nd with Wells. Upside down about 180K and tried to get help before we filed bankruptcy. They said we did not qualify for help becuase of our debt to income was too high. We ended up filing bankruptcy and I called again, this time they said because of bankrputcy filing I would have to reaffirm under original terms and then after bankruptcy complete we could apply again. Being so upside down we decided not to reaffirm. We were just discharged and plan to try and get a mod but if they do not work with us then we plan to walk. I have heard many lenders will not work with you once you file so you would be wise to work it our before if you can. If you end up in Bankruptcy under chapter 13 you may be able to eliminate the 2nd, if you do a chapter 7 then no way to strip it. The 2nd will still be there even if you do not reaffirm and you will still have to satisfy it to sell or refinance the loan down the road. The 2nd mortgage lender can also foreclose but they have to buy out the 1st mortgage and right now most let it sit if you are underwater...We are hoping that we can work a settlement on our 2nd so then we will be less under water. No legal advise here just my situation and things I learned in our process. Good luck!

[Winterfield]

PCBFL Thanks for all the insight. In chapter 13 do you pay back a % of the second ,like with other debts?

[robijamie]

We filed Ch7 Bankruptcy, did not reaffirm the debts. Anyway, we have still not had BofA nor CHase (2nd mortgage) work with us. We are still living here, but have not had a loan mod or anything. I'm seriously thinking that we won't. It seems like the impossible.

As far as a CH 13, you can lien strip the 2nd mortgage, and it is wiped away completely. But then you do have to have a payment plan on the rest of the debt you owe for about 5 years.

[PCBFL]

We did a 7 because we qualified due to having over 51% of our debts classified as "business" debts. Our income exceeded the guidelines but this is a little loop hole we fit into. On a 13 you do have to pay back a portion of the debts and my understanding is they establish what you can pay based on your income. If you do the 13 in some cases the 2nd mortgage can be totally stripped and you pay nothing. I think it is up to the judge in the case and how far upside down things are. Most law firms who handle bankruptcy will do a free consultation but you should talk to 2 or 3 before you file. We spoke to 2 and the first one was one of those big firms, not very helpful with info. You really need someone to guide you into the process and advise what is the best way to handle the process. Our bankruptcy honestly was painless, dealing with trying to get a loan modification has been 10 times worse than the bankruptcy process. I told my lender we were goign to file and they said after we did to call them back and then they wwould help....needless to say I was unhappy to call after adn be told sorry no help until you reaffirm and discharge. I had given up but have read several stories of people who worked it out after bankruptcy. We are still living in the home, saving cash and if we can work it out great, if not we will be renters and honestly that is probably the wise choice with being so upside down.

[faith]

Originally Posted by Winterfield

PCBFL Thanks for all the insight. In chapter 13 do you pay back a % of the second ,like with other debts?

Winterfield,

In Chapter 13 bankruptcy, you file a repayment plan with the bankruptcy court to pay back your debts over time. The amount you'll have to repay depends on how much you earn, the amount and types of debt you owe, and how much property you own.

A creditor can get around the automatic stay by asking the bankruptcy court to remove ("lift") the stay, if it is not serving its intended purpose. For example, say you file for bankruptcy the day before your house is to be sold in foreclosure. You have no equity in the house, you can't pay your mortgage arrears, and you have no way of keeping the property. The foreclosing creditor is apt to run to court soon after you file for bankruptcy, to ask for permission to proceed with the foreclosure - and that permission is likely to be granted .

A home is an asset usually secured by a deed of trust. The mortgage company is entitled apply to the court for relief from the automatic stay, the order preventing creditor action by virtue of the bankruptcy. Depending upon several factors, you may be able to prolong a foreclosure until you have received your discharge from bankruptcy. Usually, to keep a home that is in foreclosure you will have to make a deal with the Mortgage Company. This is the key, you still must work something out with the Mortgage Company to repay the past due amount. This is why filing for Bankruptcy is like putting a band aid on a bullet wound… it is a temporary relief.

Bankruptcy may buy you a small amount of time but negotiations will still need to be made with the Mortgage Company to enable you to keep your home. Most people who file Bankruptcy to save heir home from Foreclosure wish they had not because in most cases they are in a worse position that when they started.

According to American Bar Association 96% of the people who file bankruptcy end up losing their homes anyway—so they’re left with a foreclosure AND a bankruptcy on their records. In some cases, bankruptcy is still a viable option, but don’t make any decisions without getting professional advice. Filing for bankruptcy should protect you from any collection action taken by your lender. However, your ability to file for bankruptcy protection will depend on your income, assets, and numerous other factors which you must carefully consider to determine if bankruptcy is the best solution to your problem. I strongly encourage you to consult with a qualified bankruptcy attorney to help you figure out if bankruptcy is a good choice for you, and if so, which type of bankruptcy you should file.

Take care and God bless

[dtap57]

Faith, Im not sure where you got the info on 96% of people filing bankruptcy end up losing there homes? I can tell you that it isn;t even close to that number. Chapter13 filing is what most use to keep there homes. It is very possible to also use chapter 7 and keep your home.

[faith]

Originally Posted by dtap57

Faith, Im not sure where you got the info on 96% of people filing bankruptcy end up losing there homes? I can tell you that it isn;t even close to that number. Chapter13 filing is what most use to keep there homes. It is very possible to also use chapter 7 and keep your home.

Well, I got this information from the American Bar Association journal, but I forgot the link and that was a long time ago. I've searched the ABA link again and I can't find that report anymore, however Ive researched the net and this is all I found;
where do i find that aba reported that 96% of homeowners end up losing homes after filing bankruptcy - Google Search

Foreclosure assistance & real estate services

[cahomeowner]

Originally Posted by Winterfield

Hi everyone,
I working with Litton Loan and Chase on my second I have a trail mod going with chase , but nothing with Litton. I am upside down on my house by 40% If I declare Bankruptcy (which i will have to do soon) should i try to wait for Litton to get bank to me? what would happen with second with chase? Would they stop working with me and make reaffirm the debt. I would like to keep my house. Any help would be great.

this depends if your going to file chapter 7 or 13. if you want to keep the house then you would file 13. I would also research lien stripping to see if that might help you in your situation. some folks mentioned it above but do your own research so you understand how it works.

it would be better to get the loan mod done before filing. the chapter 13 plan payments are determined by a formula. the 2nd and any unsecured credit would get very little depending on how much surplus you have left.

if your planning on walking away then you could file a chapter 7 and get a discharge not only on your mortgage but any unsecured debt like credit cards, line of credit, etc

[dtap57]

Faith, im not sure where the American Bar Association got that info but i can tell you it isn't that high. I know a lot of people who have filed bankruptcy in the past and i don't know one person who has ever lost there home. The ideal of filing bankruptcy for a lot of people is to keep there homes.

[faith]

Originally Posted by dtap57

Faith, im not sure where the American Bar Association got that info but i can tell you it isn't that high. I know a lot of people who have filed bankruptcy in the past and i don't know one person who has ever lost there home. The ideal of filing bankruptcy for a lot of people is to keep there homes.

Just think that American BAR Association is a big organization and they have a lot of members, lawyers all over CA and I am sure the reason why they know is through their survey through the help of their lawyers. I'll probably email ABA to find out how do they determine that ratio.

And this is the reason why you need to hire a bankruptcy lawyer who will fight for you, an honest, reputable and experienced bankruptcy lawyer who is concern and understand about your situation.

I have seen a lot of people here in San Diego and even in the news who filed for bankruptcy and lost their home to foreclosure. One particular incident was a woman lost her home due to unable to pay the money she owed to her lenders. She filed for bankruptcy, but she ended up losing her home. She chained herself in front of her house to stop the Sheriff take over the house, but she ended up in jail. After her release, she went back to her house and vandalized that house she no longer own. The last time I heard, she is still in jail. There's also some that I saw on tv news they have filed for bankruptcy but even that didn't stop to lose their homes. Some even killed themselves because they are unable to accept the dissapointments, hopelessness, no where to turn to and the embarrassment of foreclosure and filing for bankruptcy.

Bankruptcy laws changes all the time and very strict now. That's why you need to hire an expert in Bankruptcy law to make sure that you don't lose your home into foreclosure and be able to keep the home you have. You have to act fast because Time is always the essence in Foreclosure, Short Sale, Loan Modifications and filing for Bankruptcy.

Checking referrals about the lawyer you are planning to hire and always be careful. Check the State BAR of CA or BBB to make sure he is license to practice law in CA.



Best wishes to you and God bless..

[chiamonga]

We have a home that we do not live in nor do we rent. It is just empty. We couldn't sell it or rent it out so we stopped paying our 1st and 2nd on it. We are filing 7 but were told by our atty that both of those debts would be eliminated. We live in California, if that makes any difference. I hope we do not receive a surprise that says we have to pay on our 2nd.

[faith]

Originally Posted by chiamonga

We have a home that we do not live in nor do we rent. It is just empty. We couldn't sell it or rent it out so we stopped paying our 1st and 2nd on it. We are filing 7 but were told by our atty that both of those debts would be eliminated. We live in California, if that makes any difference. I hope we do not receive a surprise that says we have to pay on our 2nd.

Chiamonga,
Just make sure that your lawyer is a Bankruptcy Lawyer and you have checked his license at STATE BAR of CA to see if he is license to practice law. If he is then you don’t have to worry about anything because I am sure that he knows what he is doing and that’s what he’s been trained for.

Please click the link below it will give you an idea about Chapter 13 and Chapter 7.

http://www.nolo.com/legal-encyclopedia/faqEditorial-29047.html#1

http://www.bankruptcyaction.com/chapter13.htm

http://www.bankruptcyaction.com/Chapter7NewLaw.htm#meanstest

http://www.usdoj.gov/ust/eo/bapcpa/20090315/bci_data/median_income_table.htm

Attorney Search link:

http://members.calbar.ca.gov/search/member.aspx

Thanks and God bless,

[Winterfield]

Thanks for all the help. I do have one more question on a loan mod. If I hold off on bankruptcy and my credit continues to get worse. Would a bad credit report and a lot of outstanding stop the bank from offering me a loan mod?

[Winterfield]

Thanks for all the help. I do have one more question on a loan mod. If I hold off on bankruptcy and my credit continues to get worse. Would a bad credit report and a lot of outstanding DEBT stop the bank from offering me a loan mod?

[faith]

Originally Posted by Winterfield

Thanks for all the help. I do have one more question on a loan mod. If I hold off on bankruptcy and my credit continues to get worse. Would a bad credit report and a lot of outstanding DEBT stop the bank from offering me a loan mod?

Here are some of HAMP guidelines for Loan Modification:
Unemployed, disability, retired are all ok as long as you have income, you qualify on your gross income not net income, you do not have to be late in mortgage payments, if you are late it's ok, credit does not matter, the lenders know everyone's credit is affected due to this market and it's for Primary Residence-Owner Occupied. It also depends on who your lender is and how long they decide to approve a Loan Modification.

But one thing is for sure, the squeaky wheel gets the grease. You need to be bold, persistence and patient in order to have a successful Loan Modification. Get all the Executive team names and email of your bank, including their negotiator and the CEO's and email, mail, fax them 2 or 3 times a week. If your lender is giving you hard time and I don't care attitude, send letters to your Senators, Congressman, President Obama, the media and tell them your dilemma. Do not let them frustrate you. It's time to let them taste their own medicine. Keep trying, keep fighting, fight a good fight of faith, hold on to what you think is right and do not stop until you get the result that you wanted. Let us all get back the American Dream that the People of America used to have. America is a Land of Opportunity where honest, truthful, reputable Past Presidents and Leaders ruled and fought for this country. These Leaders and Lenders now is making America a laughing stock of the whole world, not only that a Den of Thieves. I hope and pray that your Loan Modification will be approved in your satisfaction.

My thoughts and prayers are with you and family. God be with you always.

Blessings,

[Winterfield]

Faith thanks for all the help.(and everyone) it has been a real eye opener. How do i get past the gate keeper and find out the CEO's# and email or anyone above the person that answers the phone. After 3 months they finally told me who my investor is (my loan is with Litton Loan)... they just keep telling me they are reviewing my docs and ask for one more thing (that i had already sent earlier) Thanks again