Bankruptcy - anyone gone through it?

[Dayze]

well, after a 12 month fight with our mortgage company and creditors; exhausting all savings; cashing out 401ks; stopping 401k contributions.....

it appears the end is near. We are being foreclosed upon 10/15/09.

our lender has being jerking us around for 5 months with a loan modification and I was informed today by the VA that even if the mod is approved, it will likely be a very miminal impact to our monthly commitment/cashflow etc.

Anyone have any suggestions, opinions on the matter? It's really tough right now.

Thanks guys/gals.

Dayze

[CaliforniaChief]

Originally Posted by ferrarispider95

$1500 rent on a $110,000 house....DAMN...sign me up for a few of those.

How in the hell where there payments 2700 a month. Even they paid $200,000+, I still couldn't see getting close to those payment

They refinanced themselves up to the height of the value of their home...over $340,000...

Dayze it would be good to find someone to be your go-between if you negotiate a short sale...someone who is fighting for you but not emotionally connected to the situation.

[Dayze]

Originally Posted by CaliforniaChief

They refinanced themselves up to the height of the value of their home...over $340,000...

Dayze it would be good to find someone to be your go-between if you negotiate a short sale...someone who is fighting for you but not emotionally connected to the situation.

I agree.

I’m in the process of finding out if they will be willing to do a Deed in Lieu of Foreclosure (thanks MahiMike for the suggestion).

I contacted the VA to determine if a foreclosure were to go through, could the lender pursue any negative equity from me after the foreclosure. They advised ‘no’. The only thing I might be on the hook for, would be any overage with the VA in order to use a VA loan in the future. I would have to resolve this before I would eligible for a VA loan. Apparently around 25% of the loan amount covers any potential negative equity. I’m 99% sure this 25% would be enough to cover me from a future VA eligibility standpoint. But either way, the lender wouldn’t be coming after ‘me’.

I’m basically at the point where I’m going to request a Deed In Lieu of Foreclosure; or they can have the GD thing through the regular foreclosure process. Especially upon learning from the person handling my VA case that the loan mod will most likely not reduce my payment significantly enough to actually ‘help’ in continuing to make payments. He said after they tack on the missed payments and any penalties, and the small rate reduction they would apply would probably only effect my payment by $50; $100 at best; it might even increase. He also said he can’t recall ever seeing a lender simply move the missed payments to the back end/deferred.

So, either way it looks like we’d have to move. It seems it would make more sense for them to do a DIL because they could sell the property immediately, rather than waiting through the 12 month redemption period of the VA loan in order to sell it. Not to mention saving the costs of going through the foreclosure process. But, even if they won’t do DIL, fuck em. They can have it.

While we have scrapped together enough to get current, I don’t trust Wells Fargo. The money will obviously go towards unrealized interest, and not effect principle; our payment most likely wouldn’t change/might even go up; so we’d be right back in the same spot we were in last October. Only next time we fall behind, we might be out on our a** with zero cash – since we used everything to get ‘current’. Not to mention we calculated that each of us would have to work about 25 hours per week at a part time job simply to break even each month.

DIL, or foreclosure. Either way I’m ‘done’. We’re going to spend Saturday driving around looking at other areas – trying to find contract for deed type FSBOs/Builder etc. Or, worse case, apartment / townhome / rental etc. a Temporary fix to get debt back down (debt incurred because of 6 months of no job), restore credit etc. We’ll get back in the saddle in a few years and may be better off than if we were to stay.

We fought the good fight, but it’s time to realize we shouldn’t go into the next round.

[sparkky]

sorry to hear the news, man. I wish ya the best of luck.

[MTG#10]

Thanks to my cheating whore of a wife Im getting ready to go through it as well.

[ArrowheadHawk]

I thought you could keep the house in a bankruptcy.
Posted via Mobile Device

[Frazod]

I went through it about 20 years ago - the result of youthful irresponsibility and stupidity. I'd gotten myself so deep in debt that I had no other choice. I went to one of those debt consolidation places and the guy said "You're ****ed, file for bankruptcy." Took a long time to recover, but I've got excellent credit now. IIRC the interest rate on the first car I bought after that was 33%. Ouch.

[Dayze]

Originally Posted by ArrowheadHawk

I thought you could keep the house in a bankruptcy.
Posted via Mobile Device

You can under protection laws; mainly Chapter 13 I believe. You’re basically agreeing a payment plan with those assets that are protected and no liquidated; and you make those payments to a court appointed trustee etc. And, from what I’ve read (correct me CPers if I’m wrong), if you for some reason violate the payment plan (miss payments etc), the assets can move to an unprotected state and would be fair game to pay creditors etc.

Since we don’t have kids etc; moving isn’t AS big of a deal. And, if the lender would do Deed In Lieu of forclosure; basically give the house back, they agree at that point they won’t pursue any penalties etc…and the remove the foreclosure status. You could move, get into a rental or contract for deed home etc at a rate that is affordable; get yourself back on your feet etc. at that point, the pieces of your credit you’re trying to restore are merely any late payments etc. Much easier to restore than a foreclosure or bankruptcy (although even those are recoverable…they just take a lot longer).


Each scenario is different/what works best for everyone.

I would imagine if you had 3 kids etc….maybe filing for Ch 13 protection might be the better route etc.

[Kylo Ren]

Dayze, I have a possible solution for you. Can you play RT?

[Dayze]

Originally Posted by John_Wayne

Dayze, I have a possible solution for you. Can you play RT?

Lol.

I bet it could I’m only 6’ and a soft 235….but I have a high motor, and a nasty streak about me.

Teams haven’t looked at me very much since I tweeked a hammy at the Combine.

[Demonpenz]

had some friends in trouble, they found roomates off of craigslist thought seem to be working out.

[Bugeater]

Originally Posted by Dayze

You can under protection laws; mainly Chapter 13 I believe. You’re basically agreeing a payment plan with those assets that are protected and no liquidated; and you make those payments to a court appointed trustee etc. And, from what I’ve read (correct me CPers if I’m wrong), if you for some reason violate the payment plan (miss payments etc), the assets can move to an unprotected state and would be fair game to pay creditors etc.

Since we don’t have kids etc; moving isn’t AS big of a deal. And, if the lender would do Deed In Lieu of forclosure; basically give the house back, they agree at that point they won’t pursue any penalties etc…and the remove the foreclosure status. You could move, get into a rental or contract for deed home etc at a rate that is affordable; get yourself back on your feet etc. at that point, the pieces of your credit you’re trying to restore are merely any late payments etc. Much easier to restore than a foreclosure or bankruptcy (although even those are recoverable…they just take a lot longer).


Each scenario is different/what works best for everyone.

I would imagine if you had 3 kids etc….maybe filing for Ch 13 protection might be the better route etc.

Just watch yourself, get everything in writing before you agree to it. I don't proclaim to know a lot about this, but I do know that when it comes to people getting money owed to them, they will do whatever it takes to get it, even if it means lying straight to your face. Also be wary of any service that says they will "help" you, sometimes they will leave you worse off than you already were.

Remember one important thing, the ONLY person who will be looking out for your best interest is YOU.

[Fairplay]

Originally Posted by MTG#10

Thanks to my cheating whore of a wife Im getting ready to go through it as well.

That bitch!

[Dayze]

Originally Posted by Bugeater

Just watch yourself, get everything in writing before you agree to it. I don't proclaim to know a lot about this, but I do know that when it comes to people getting money owed to them, they will do whatever it takes to get it, even if it means lying straight to your face. Also be wary of any service that says they will "help" you, sometimes they will leave you worse off than you already were.

Remember one important thing, the ONLY person who will be looking out for your best interest is YOU.

Absolutely.

If they would agree to do it, I would have their offer contract for the DIL reviewed by an attorney to cover me. if there is any language in that contract that is open-ended in their favor I would have them change it etc.


Been there - having someone tell you one thing, then it comes back to haunt you. That’s how we ended up in this mess when they told us (I’ve requested the transcript of the call…..but haven’t been told yet if they will provide it. They said they would ‘review’ the call…..suuuuuuure.) to not make a payment during the loan modification process for July, Aug, Sep; and to resume on Oct if we paid June’s in full. Which we did. Well…by doing that, we not only entered in the foreclosure process…but we screwed ourselves because now we’ve missed a payment. Therefore, virtually no one would refinance, we don’t qualify for the Obama recovery (whatever it’s called) because we’ve missed a payment in the last 12 months. So, basically at that point. Wells Fargo had us by the cajones; they know whe can’t refinance /go with someone else. They know if we want to stay, we have to play by their rules/terms.


Lesson learned.

[Fairplay]

Originally Posted by Dayze

Lesson learned.

That was one tough lesson.

[Skip Towne]

Originally Posted by MTG#10

Thanks to my cheating whore of a wife Im getting ready to go through it as well.

How is your cheating whore of a wife? Anything new in that deal?