Chapter 13 cram down options...

[clarkj03]

One of our neighbors just received an offer from their second mortgage company to settle their outstanding $80,000 2nd mortgage for $6300 in a lump sum payment. I have not received such an offer, but was considering using the Chapter 13 cram down technique to get rid of my own second and about $20,000 in credit card debt. I recently lost my job, and with some EXTREME budgeting we can continue to make our 1st - $2432 and 2nd - $743 monthly for about 5 more months. We bought our house 2 years ago for $446,000 and the same model down the street has been on the market unable to sell for 5 months at $260,000, my 2nd is only 85,000 so if I were to file bankruptcy, in all likelihood the second would be wiped out.

I was wondering if anyone has had or heard of any success in using the threat of a looming Chapter 13 filing to negotiate a pennies on the dollar offer from their 2nd mortgage company to settle the entire second, so that they get something rather than nothing. I would prefer not to have to file Chapter 13, but will if that is the only way I can keep my house. I feel like if I could free up the $750 per month, I could pay down my credit cards, and avoid Chapter 13 all together. I could do that if I got an offer from Chase to settle my 2nd for $6000.

Any thoughts?

Jeff Clark
Lake Elsinore, CA

[clarkj03]

I'd love to hear more about the Chapter 13 lien strip, and if anyone has used it successfully to strip their second from their house, in essence reducing their purchase price by 20% or so...

I'm seriously contemplating doing it for just that reason. To bring down my initial purchase price so I am in the black sooner when the market comes back.

Jeff

[tramer]

Hello,

We are in the process of filing chapter 13, our lawyer came reccomended from "Community Housing Works" (part of the HOPE NOW organization), this is crucial. We went to a local a attorny and she really did not know what she was doing. She counted our motorhome as an usecured debt, once she did this, added our school loans and then our second at $128,000, she said we didn't qualify. We were devastated, however my counselor referred us to someone in San Diego, they were blown away. Our motorhome is a secured debt, take that out of the equation, our 2nd will be stripped of $128,000, our school loans will have to be repaid and have to count, yet our motorhome will go as well as credit cards. I never thought I would go this route, we have always prided ourselves in our awesome credit. However, keeping our house is a priority. We are sleeping now at night. WE are in the process of our loan mod with Option one, it is almost done. Our attorney wants us to see what we can get prior to the filing BK on the 22nd of December.

Ok, so in a nutshell, if you explore this avenue, make sure you work with a BK attorney who knows what they are doing.

Best of luck.

[clarkj03]

Thanks for your response. It is always encouraging to know there are others out there thinking the same way we are. I agree with you, that I have been proud of my credit, and still maintain a decent credit score, tho it has gone down about 50 points since buying my home 2 years ago.

I have a preliminary appointment with a lawfirm out of San Diego that also maintains an office in Temecula. Since I have no idea about lawyers and going rates etc..?

Thanks again,

Jeff

[Moe Bedard]

Jeff,

On this forum you would need to get referrals from either the Bar Association of your state or
National Association of Consumer Advocates – Consumer Protection Advocates and Attorneys

our forum is sponsored by the attorneys on the home page so that we are able to offer the information and advice that we do on the forum for free to the members.........

[clarkj03]

Thank you, those links are very helpful.

Jeff

[jhn_plsn]

Could you explain or direct me to a link for the cram dowm option?
I am upside down and was able to have the first modified but Countrywide will not do anything so far on my heloc. They did not respond to a letter from six weeks ago, but I called and they said I was current and could not do anything. My response was that I was current for the first time in 14 months and that I am in the middle of filling chapter 13 but would rather not if avoidable. At this point he took down some basic income info and found that I had a file already and that I should check back at the end of the week.
Is this close to how you might go about it?

[Moe Bedard]

Moe wrote about it here in this thread............

Discussion: Principle Reductions: Wipe Out Your 2nd Mortgage With Bankruptcy

[ultimate4799]

Originally Posted by tramer

Hello,

We are in the process of filing chapter 13, our lawyer came reccomended from "Community Housing Works" (part of the HOPE NOW organization), this is crucial. We went to a local a attorny and she really did not know what she was doing. She counted our motorhome as an usecured debt, once she did this, added our school loans and then our second at $128,000, she said we didn't qualify. We were devastated, however my counselor referred us to someone in San Diego, they were blown away. Our motorhome is a secured debt, take that out of the equation, our 2nd will be stripped of $128,000, our school loans will have to be repaid and have to count, yet our motorhome will go as well as credit cards. I never thought I would go this route, we have always prided ourselves in our awesome credit. However, keeping our house is a priority. We are sleeping now at night. WE are in the process of our loan mod with Option one, it is almost done. Our attorney wants us to see what we can get prior to the filing BK on the 22nd of December.

Ok, so in a nutshell, if you explore this avenue, make sure you work with a BK attorney who knows what they are doing.

Best of luck.

Hey Tramer, Are you from bay area? I'm in the midst of searching for attorney who can help me with BK chapter13. Please let me know if the attorney working on your BK file is from Bay Area(I'm from San Jose) and please send me contact info... I appreciate it..

[tramer]

Hello there,

We are from the San Diego Area. I do think there is a link on here for you to search for attorneys. It is my understanding that the site has attorneys referred to you. Check the above posts and there is a link to follow.

We are really at peace. We fought for our Loan Mod. on our own, on the 1st we just recieved the paperwork, and had all the backed payments and taxes added on. The loan is fixed for 30 years at 4%. Our attorney waited to file until we got the loan approval. Now we are filing Chapter 13 and having the second stripped. Yes our credit is tarnished. But our choices were losing our home, or keeping our home. Both would result in tarnished credit. For the sake of our 11 year old and 9year old, as well as saving our name we chose Chapter 13, it is between my husband and I and our kids can keep their home.

I hope this helps.

[Moe Bedard]

the link is above and has already been posted on thread........
National Association of Consumer Advocates – Consumer Protection Advocates and Attorneys

[Moe Bedard]

..............attorney referrals can be found at
National Association of Consumer Advocates – Consumer Protection Advocates and Attorneys
or
your state's bar association referral network by specialty

[tsalazar]

Hello Jeff, we are filing chap. 7 and are hoping our second will be included as unsecure debt since the house value does not warrent it being secured any longer. Our second is with Citi and they are outsourcing the debt and treating it like a credit card now--this enables us to included it as unsecured bedt when filing. Hopefully it all works out with the first being modified now!
Trish
Corona, Ca

[md37793]

did your neighbor just threaten them or did he actually file chapter 13? Also, who was his servicer?

Originally Posted by clarkj03

One of our neighbors just received an offer from their second mortgage company to settle their outstanding $80,000 2nd mortgage for $6300 in a lump sum payment. I have not received such an offer, but was considering using the Chapter 13 cram down technique to get rid of my own second and about $20,000 in credit card debt. I recently lost my job, and with some EXTREME budgeting we can continue to make our 1st - $2432 and 2nd - $743 monthly for about 5 more months. We bought our house 2 years ago for $446,000 and the same model down the street has been on the market unable to sell for 5 months at $260,000, my 2nd is only 85,000 so if I were to file bankruptcy, in all likelihood the second would be wiped out.

I was wondering if anyone has had or heard of any success in using the threat of a looming Chapter 13 filing to negotiate a pennies on the dollar offer from their 2nd mortgage company to settle the entire second, so that they get something rather than nothing. I would prefer not to have to file Chapter 13, but will if that is the only way I can keep my house. I feel like if I could free up the $750 per month, I could pay down my credit cards, and avoid Chapter 13 all together. I could do that if I got an offer from Chase to settle my 2nd for $6000.

Any thoughts?

Jeff Clark
Lake Elsinore, CA

[michaela54]

I too am filing a BK 13 with the hope of the cram down law passing. I live in S FL the homestead laws here will protect the home from the inpending foreclosure we will accept a payment plan on the first and discharge the second we are upside down because of the second mortgage. It is with Citi. I am interested to know about the above person that is eliminating citi second with a Chapter 7. Every thing our lawyer has told us the only way to get rid of the second is by filing the BK 13. It may because we are in S FL. Any response will be appreciated.

[tsalazar]

The reason the 2nd for us is able to be included with Chap. 7 is because the lender turned the debt into unsecured debt and placed it with a collection agency. They are treating it like a credit card not a 2nd.

[michaela54]

My second with citi is also unsecured or I shuld say it is secured against the first mortgage wich ipside down too. When did they start treating it like credit card debt? I am 3.5 months behind.

[tsalazar]

I am 6 months behind but the told me it would be outsourced end of December if a payment wasn't received. My house is in Florida too and my second is with Citi also. Hmmm....

[jhn_plsn]

Wouldn't the second have to actually remove themselves from the tittle for it to be treated as CC debt? Thats more expenses on thier behalf, so why would they do it? Maybe its just how the collections agency treats it as they are not the ones actully on the note.
If it is true then it would help if BK was your only real option and since most who file 13 do not complete it and end up in a 7 anyway you should just file a 7.

[horlinf]

13,12,11,9,7 whatever take to save our homes let fight back.