chap 7 or 13

This is similar to your other post from yesterday.

1. Since there is equity after consideration of the 1st and this property will be your primary residence (once you move back in), a Chapter 13 will not allow you to reduce the 2nd UNLESS the lender agrees. There simply is no law that allows you to force a modification of a loan that is secured (even if in part as opposed to totally unsecured) solely by your principal residence.

2. Will the 2nd foreclose in the context of a Chapter 7 if you do not reaffirm and do not pay? Your guess is as good as mine. You indicated that the 2 loans are through the same lender. I believe there is a better chance that the 2nd will foreclose as a result but, who knows.

3. I will assume that you are moving back into the home BEFORE you file bk and, as a result, will not be collecting rents. However, if my assumption is not correct. . . once you file you CANNOT collect rents. Any rent collected after you file bk belongs to the Trustee. If you collect rents and fail to turn the $$ over to the Trustee you can lose your right to a Discharge.

Des.

You're right. I couldn't see original post until now. Basically asked you the same thing twice. Thanks!

Des,

just tried to make a payment on my forebearance loan by calling BB&T and they said my case was closed. Decision based on them resending HAMP paperwork in December and not receiving it back. Rep asked me if I received paperwork, said no (even though I did nothing has changed) . He asked me again, I said didn't you just ask me that. He apologized and said I'm sorry if I mispoke. He said he is trying to reopen the case, "since you didn't receive paperwork" and policy is for a supervisor to call me back within 48hours. I asked to speak with a supervisor and he repeated their policy about calling me back.

I have a signed forebearance agreement beginning 9/30/2010 continuing through 11/30/2010 and agreed to a monthly payment date every 15th. However, I made December payment (payment over the phone through customer service agent) and they said nothing to me about renewing existing agreement. I called today and rep said I couldn't make payment, account was closed for not getting paperwork back. Forebearance program is valid till June/2011 from federal government. I stated that to him, and he basically said same rhetoric.

I do have a credit card with them that I just let go. I felt if I'm filing chap 7, no sense in continuing to make minimum payments. Anyway I can save my house? If I filed with courts tomorrow would that buy me time?

Filing a bk before the completion of a foreclosure will delay the creditor.

If you want to "save" the home through bk you must file a Chapter 13 and propose a Plan that will "cure and maintain" over 3 to 5 years - by making monthly payments to the bk Trustee while resuming and maintaining regular monthly mortgage payments.

If you want to "stall" the loss of the home and you otherwise qualify, you can file a Chapter 7. That will delay the loss of the home for at least 90 days, probably more - just depends upon how fast the lender works to get the property removed from the protection of the bk.

I can't give you any words of wisdom as it relates to the loan modification process as I have never personally dealt with it.

Des.

Thanks Des. Quick question. Form 8, if I'm checking the reaffirmation box for stay and pay, I should also be checking the "exempt" box too vs "non-exempt" right? There's a 50k homestead exemption to retirees over 65, but not applicable to me, don't think. Thanks for all your help.

If your state has a homestead exemption that is applicable (even if there is no equity), claim it on Schedule C and mark the box "exempt" on the Statement of Intentions.

As to the Statement of Intentions, DO NOT check off "reaffirm". You mark it as "retain" and in the line that states "other" indicate that you will "continue to service the loan and/or seek loan modification".

Des.

Des, on 6c under Chap 7, would 522 (b)(2) or (b)(3) be checkmarked using "state" exemption?

Kev,

In response to your question regarding 522, I do not know the answer. Post this question at www dot bkforum dot com. Make sure you let them know what state you are in.

Des.