Hi Everyone! I have been reading this forum and REALLY, REALLY NEED YOUR ADVICE!!! asap. We are in a real quandry. We would like a mod or rate freeze but more than likely my husband will have to file chapter 7. Here are the facts:
In Dec 2006 we got an ARM with a 5.85 rate/interest only but it says 7.99 APR. For 2 years we pay $2047 per month until Feb 1st of 2009 when it goes to $2887 per month.....didn't know that until a month ago! When we got the loan, I thought we were getting a 2/28 I/O ARM but it changed when we got to the Office to a 5/1 I/O. They hurried us through and we signed away. When I got home I noticed the income was inflated also and an additional broker fee was added at the Office they said. The loan was full doc and we gave them copies of our income. The house is worth $530k (tax value) down from $548k. The loan is $420k.
At that time, the plan was to get me back to work (stay at home mom) and refi to a better rate. Well, in Jan 07 my daughter had unexplained breathing episodes that lasted months, she missed 30 days of school and it simply resolved itself in May 07. I was fatigued, had memory issues, brain fog and
gained a lot of weight. I couldn't really function to the point I sat in a chair fatigued. I finally went to the doctor in Dec 07 and found out my thyroid was off. I got the medicine in Jan 08 and am now feeling better but no job yet. But now, we are drowning in credit card debt and our ARM adjusts in Jan 09 with an increase of 40%. We got turned down for a refi this month with a less than 500 score on my husband and mine at 560 or so.
My husband has $26k in debt ($500/mo) that is delinquent and I have $11k ($300/mo)that is barely hanging in there, with only one that is 3 mos behind that I can work with hopefully. If we go for a loan modification, the $500/mo credit payment on my husbands cards is going to make us need more income to have that $200 left over in the income/expense worksheet. If we file chapter 7 on my husband soon, that will eliminate the $500 (which we are not paying) and make the income needs less. Should we file the Chapter 7 asap, wait for the discharge and then ask for a rate freeze or mod? Either way I have to get a job but if I make make more than $25k we will exceed the means test for family of 4 or make too much for mod but too little to survive the reset.
My husband grosses $65k, net per month is about $4285, mortgage now $2047, taxes are $320/mo, home insurance is $90 per month, credit cards w/out chapter 7 are $800/mo (only $300 if chpt 7 on husband), cable/internet/phone is $150/mo, cells are $100/mo (need for communication w/kids), Electric is $183 this month but varies, oil is $200/mo but varies, prescriptions $30/mo and we can play with gas, food amounts but don't they look at your statements? I have reduced the food and gas this month as much as possible.
We are current on the mortgage but are going to have to put ourselves behind on regular bills to pay our property tax bill due August 1st. We are frozen with fear. I don't know if we should file chapter 7 first on my husband to reduce the expenses on paper or try to get a mod/rate freeze first?????? SOMEBODY PLEASE HELP ME TO FIGURE THIS OUT? I am willing to go to work now that I feel better but I don't know how much money I should try to make to make everyone happy and still qualify for chpt 7 and a freeze/mod. I'm SO CONFUSED. HELP!!!!!