Personal Bankruptcy What happens to my home?

[Chelle1168]

If I were to file a BK, what happens to my home? The bank still owns the majority of it ($60,000 of $79,000), though I have owned it for 8 years. I recently was forced -Wells Fargo says, by FEMA- to buy flood insurance which took my monthly payment (including escrow) from $646 to $772. In addition, the mortgage company paid the insurance up front from my escrow account last year and have now tacked the amount onto my payments for the next year. Beginning in January, my payments became $995 a month. There is NO way I can afford this amount and have been sending $700 a month to keep at least something going into the account. I am, however, in default now.

An $11,000 reposessed vehicle, a $6,200 student loan that is coming due this month and some smaller debts, in addition to the mortgage company calling have my phone ringing constantly.

If I do file Chapter 7, is it possible to keep my home? I am a 43 year old single mother of 4 and don't see ever being able to buy one again and HATE the idea of moving my family into a tiny apartment!

I drive a beater car that I just bought with my income taxes for $3100 and have no real assets other than a savings account that I can never seem to not use. Oh, and I have a small savings account for each of my 3 younger children (in the PSECU in their names. I am listed as custodian) for things that come up like prom dresses, football fees, etc. Will those be taken as well? The biggest one is about $175.

More importantly, I work for the Commonwealth. Being a State worker, will that void the option of filing a BK in the first place?

The site says the filing fee is about $300....is that all that it will cost me or are there other fees?

Thank you to whomever offers advice! I am not trying to be a deadbeat, but I'm starting to feel like I am going to drown!

 

[army judge]

BK no longer allows you to keep the home without restructuring and reaffirming the debt.
It can buy you additional time to stay in the home.
Your employment status has nothing to do with BK eligibility.
Before you leap into BK, I suggest you speak to a couple of local BK attorneys.
The initial consultation is often free of charge or obligation.
So, go prepared to ask plenty of questions.
The fee can be waived in some cases, Google BK fee waiver!

 

[Chelle1168]

Thank you so much Army Judge! I will speak to a couple of them. I just found out about this option from a friend who is being forced to file by his ex band wanted to get some basic info...

I just have two more questions. By restructure or reaffirm, do you mean refinance the house? Would a mortgage company be willing to do that if I'm filing a BK?

 

[despritfreya]

By restructure or reaffirm, do you mean refinance the house? Would a mortgage company be willing to do that if I'm filing a BK?

The bk Code does not require you to reaffirm a loan secured by real property such as your residence. A Chapter 7 does not help you save the home. If you file Chapter 7 keeping the home is between you and the lender. If the lender is not willing to work with you, such as agreeing to a loan modification, you must keep your payments current or you will eventually lose the home to a foreclosure. Attempting a loan modification has nothing to do with the bk.

If you are behind in mortgage payments and wish to attempt to save the home through a bk you will be looking at a Chapter 13. In a Chapter 13 you are allowed to "cure" (bring current) the pre petition (before filing bk) mortgage payments over 3 to 5 years by making monthly payments (a Plan payment) to a Trustee while RESUMING your regular monthly payments going forward. If you have a 2nd mortgage you may be able to wipe it out in the context of the Chapter 13. Bottom line is that if you cannot afford to resume your regular monthly payments to at least your first (maybe only) mortgage lender the Chapter 13 will not work.

Des.