How to avoid foreclosure amidst disability and bankruptcy

carnahandavid · Joined: 21 Dec 2006 Posts: 239 58.41 Dollars($)

Mikee,

You are filing Chapter 7 which will temporarily stop the foreclosure process until the lender is able to get permission to go ahead with foreclosure. So filing chapter 7 will not stop foreclosure but only delay for some time.

But if you were filing chapter 13 then it can be possible to include the mortgage in the plan and make missed payments from your income as per the repayment plan set and avoid foreclosure.

Guest

Mortgage debt would be used in BK if it is before the foreclosure and it's the deficiency amount used in BK if it is after the foreclosure? Is this correct?

Samantha

Hi Mikee,

I think you are thinking in the right way. If you haven't filed bankruptcy Chapter 7, and the lender declares a foreclosure, then the deficiency amount can be included into the bankruptcy. But if bankruptcy is filed earlier than foreclosure, then the deficiency amount cannot be included into the former process.

However, if you file bankruptcy earlier than foreclosure, you can include the mortgage debt but this does not mean that you don't have to pay down the debt. If it's Chapter 7, your debt is discharged and that does affect your credit score. But then, if you can pay it off within a few years, and inform the credit bureaus, your credit report will reflect that you have paid off the mortgage though it will be marked as late payment. At least, such a payment will help you in improving your score to some extent.

Hope this helps..

God bless you.

Samantha

Guest

" but this does not mean that you don't have to pay down the debt."
Unless it is #7, if it is #7 I don't "have to pay" down the debt?i s this correct?

jameshogg · Posted: Thu Jul 12, 2007 11:39 pm Post subject:

Welcome Mikee,

If it is Chapter 7 that you've filed, then you need not pay down the debt. But I think Samantha meant that if you pay down the debt inspite of filing bankruptcy, then it will have less negative affect on your credit report.

Thanks

Guest

Thanks to all for trying to get it through my thick skull. I think I got it now. I'm covered no matter which way it goes...I think.

miller_st · Joined: 17 Jan 2007 Posts: 917 168.92 Dollars($)

Guest

Seems to be. No matter what help I might get, if the monthly payment amounts can't be reduced, I'll just be in the same situation again. None of my lenders offered any help at all, even after many years of never missing a payment. Due to job loss and health it has to come to an end. Not only can I now not keep up the payments I can't keep up the maintinence. My children grew up in this house, there's alot the goes through your mind while your cleaning out and packing up. Somehow somwhere there's a positive in all this.

jameshogg · Posted: Mon Jul 16, 2007 4:28 am Post subject: RE:

Yes Mikee, there should always be something postive here, may be God is giving you the strength to fight against all odds so that in future if anything like this turns up, you will be prepared mentally to face it. By the way, what's the status of your discussion with the lender? What are they actually asking you to do. Did you ask them about deed in lieu?

Guest

We owe more than the house would sell for. I called and pleaded with the lenders about the "mortgage modification" and none offered any help at all. I was shocked to say the least. All those years and we were never behind. I'm trying the short sale idea now. Unfortunatley my health has declined to the point I can't take care of the house anymore, so I'm figuring in some strange way this will be for the best. One thing for sure, I don't know what I would have done if it wasn't for this site. Thanks for the kindness, it helped so much.

Niicss · Posted: Mon Jul 16, 2007 3:06 pm Post subject:

Mikee I understand your feelings.

Did you take help of any foreclosure prevention counseling agency? These agencies negotiate with the lender to have some sort of plan set up by which foreclosure can be avoided.

In situation when lender is not listening to borrower's request it sometimes is useful to contact these agencies.

Guest

To be honest, the lenders wouldn't be able to lower the payment enough for us to keep up and I can understand and accept that now. My health is at its worst and disability doesn't pay a whole lot and my poor wife is going to have a meltdown working 2 jobs 5 days a week, 1 of which will be eliminated in the coming months. Our credit aside (we know that will be shot to hell) when we stand back and look at it, there's a good side to this mess...somewhere. I could write a book in explaining all the good the bad and the ugly we've endured the last few years. If alot of things didn't happen, we would not be going through any of this. But as they say, "shit happens". So I guess you could say we're trying to make the best out of a rotten situation. Anyway, I'm sure we have a bumpy road ahead, but again as they say, "we'll just take it 1 day at a time". I'm sure we will have a question or 2 that I'll ask in this forum and I'll give you an update every once in awhile on just how bumpy the road ahead is. Many many thanks to all of you. Thanks for treating me like a fellow human being and not the dumb ass I feel like sometimes.

blue · Posted: Tue Jul 17, 2007 4:02 pm Post subject:

Hi Mikee,

The situation you are in can make feel the same way for any of us. You need good amount of courage to keep your mental balance right in such kind of situation.

Your credit is going to go down thats for sure but you can recover it back within a few years.

I can only hope that your problems go away and you are in better position within a few years time. It might be that your wife gets a good job and that can help improve your financial standing.

Let us know how the things progress. We will try to provide help and guidance whenever you are in doubt.

Thanks
Blue

Caron · Posted: Wed Jul 18, 2007 3:24 am Post subject:

Oh come on Mikee, you're quite cool. You are indeed practical enough as you say that lenders will not be able to lower the payment. And, yes, you are correct; sometimes we come across so many instances and acquire some experiences which are worth sharing with all. Such experiences do give others the strength to fight against difficult situations.

Well, if you do have a query or wish to discuss something with us, feel free to do so. It feels good to find out that we could be of some help to you.

good luck ahead Smile

hanth23 · Joined: 22 Jul 2007 Posts: 23 11.06 Dollars($)

Please advise whether the Chapter 7 bankruptcy has been discharged and whether your current financial position is good.

If the answer to the above question is yes, then you may stop making any payments on the mortgage and move out of the property. The mortgage company will foreclose the property; however since the chapter 7 bankruptcy has been discharged, the mortgage company will not make derogatory reporting on your credit.

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