Need solution

[eacomer]

What is the name of your state? SC
My husband & I went to a credit counselor and a bankruptcy attorn. The att. advised us to take Chap 13 if we could because it would exempt our home (we have equity) advised against chp 7. The counselor said just forget it, we couldn't ever pay the amount they came up with anyway monthly, so just ignore the calls, await judgements and go on, they couldn't touch my house and they couldn't do anything but put a lien against the house, which we will probably stay in until we die.. We own no assets except home, we are current on those payments only. Credit cards are deliquent.. can't help it, lost job, we had enough then to pay but not now, have tried negotiating, they don't seem to understand we can only afford a small amount per month. I am out of work, no one is hiring, haven't been able to get a job, I think because of age. We figured even if I got a minimum wage job, we couldn't pay the debts. My husband has a job, but doesn't work when weather is bad and there is no steady income.

Question: If we do not file chap 7 (chap 13 we can't do because we don't have steady income to pay the amt. monthly required to file it) should we just listen to the counselor? We don't want to lose our home as we will never be able to get another one and have no one to help us get a place to live. The debt got out of hand when we started a business and failed.

[seniorjudge]

Originally Posted by eacomer

What is the name of your state? SC
My husband & I went to a credit counselor and a bankruptcy attorn. The att. advised us to take Chap 13 if we could because it would exempt our home (we have equity) advised against chp 7. The counselor said just forget it, we couldn't ever pay the amount they came up with anyway monthly, so just ignore the calls, await judgements and go on, they couldn't touch my house and they couldn't do anything but put a lien against the house, which we will probably stay in until we die.. We own no assets except home, we are current on those payments only. Credit cards are deliquent.. can't help it, lost job, we had enough then to pay but not now, have tried negotiating, they don't seem to understand we can only afford a small amount per month. I am out of work, no one is hiring, haven't been able to get a job, I think because of age. We figured even if I got a minimum wage job, we couldn't pay the debts. My husband has a job, but doesn't work when weather is bad and there is no steady income.

Question: If we do not file chap 7 (chap 13 we can't do because we don't have steady income to pay the amt. monthly required to file it) should we just listen to the counselor? We don't want to lose our home as we will never be able to get another one and have no one to help us get a place to live. The debt got out of hand when we started a business and failed.

Fire the credit counselor and listen to the lawyer.

[weenor]

The counselor is incorrect because your attorney and the chapter 13 trustee can work out an affordable plan, which can include a full discharge of some your unsecured debt.

[JETX]

Oh, and a chapter 7 NOR a chapter 13 are guarantees to keep your property. Talk with a GOOD bankruptcy attorney that knows the NEW requirements.

[eacomer]

Thanks for the replys.. but
The bankruptcy attorney came up with a figure, and gave us an idea of what the payment would be.. it was way out of our reach. They said for us to look things over again and if we could come up with more income than what we showed they advised us to do Chap 13, to protect our house. However, reading about Chap 13, we can only protect up to small amount of equity, we got an appraisal since then and the house appraised very high, which tells us the court would sell our house to pay the creditors. In Chap 7 they would definately sell our house, which would not be good as we would be out on the street with no place to live, couldn't get a place cause every one requires a credit check now.

The counselor came up with a plan to repay, but said with our income we couldn't meet it either. They advised us to ignore the creditors, they couldn't touch the house, so we could keep our house. That they would probably put a lien against it, but since we will live in it till we die, they said that was better than losing our house and not having a place to live. So neither one could help us in trying to pay the creditors back.

My husband's income is not enough to pay either plan they came up with, as they both said our living expenses(which they paired down to the bone) were as much as he was bringing in, so there was none left to pay the creditors.

I have tried negotiating with creditors to send them some money monthly that I can afford but to no avail. They say it's not even enough to pay interest, even the hardship programs I asked about are more than we can pay and so many fees have been added now that even if we came up with some money we couldn't possibly pay the minimum amounts they require.
We are at wits end here. All are negatives and it doesn't seem like we can find a solution.
We just don't know what else to do?

[weenor]

The rationale behind bankruptcy is to give you a fresh start from debts you absolutely cannot pay...if you have that much equity in your home then, you can pay the debts with your asset, you simply chose not to. The obvious answer is that you sell your home, use the profit to pay your debts and buy something smaller that you can afford.

[eacomer]

yes, I agree about bankruptcy, & paying off debt with equity in home but To buy somethng smaller we can afford would not offer a solution, as we cannot buy anything now with bad credit ... We have even tried to refinance & tried home equity to pay some of the bills-turned down because of credit..

so do you have another solution?

[punkin]

did your home ever actually go into foreclosure..were you served foreclosure papers ? have you spoken drectly with your mortgage holder about forebearance ? most mortgage companies have asset resolutions dept. and sometimes they will lower pymts,reduce interest for a period of time or have other programs they can put you under until you can get back on your feet. you will need to be able to verify your hardship and income and /or lack thereof..i hope you get things worked out..we all have difficult times from time to time..my advice is no matter what happens..if you get the opportunity ,from here on out put that morgage pymt first and foremost..credit cards can wait, homes can be replaced as well,but,not as easily...DONT GIVE UP,keep trying to work things out,even when things look the worst,they can get better....i will certainly keep you and your situation in my prayers....

[eacomer]

Thank you Punkin.
My home is not going to forclose, not if we can help it, we have worked so hard all our lives to get this, we just can't lose it. We have paid all mortgage payments, none late. It is the credit cards that are the problem, because of a failed attempt at opening a business, we just simply can't pay them..The credit counselor told us the same thing as you -pay the mortgage and living expenses, and go on forget about the credit cards..the bankruptcy attorn. didn't recommend anything except to tell us to try to get our income up to where we could file Chap 13. Which we can't either and we can't pay the payments the counselor figured up either..
So all I see now is just praying it won't get worse than it is now..It's hard to sleep and live a normal life when things are unsettled. I have always had excellant credit and made a point to pay bills I owe, before I eat.. but this is way too much.
Thank you again for your prayers, we need them it seems..

[punkin]

i am so thankful that your home is not in foreclosure...see that part of my prayers have already been answered.....credit cards can wait..just keep those morgage pymts current..your home is your only asset...as i see it the credit card companies may be able to file judgement or leins against your home, but , they cant take your home , only your mortgage company can do that....when you are back on your feet you can pay those leins and/or judgements off,if in fact any are filed (you can find that out at the clerk of courts office in your county seat). don't quote me on this,but,please check into it....if its been 3 yrs or more since you have pd anything on a debt, then the statues of limitations has passed and you can tell the creditor to cease and desist...please look into this...i dont know if that applies to secured debt but i feel certain you can find that out also...try calling s.c. dept of consumer affairs....this might make you feel better...we have been where you are .actually in your state....we made it ....dont give up and i will sure keep the prayers coming your way.....please keep me posted....AND DONT GIVE UP !!!!!! i meant to ask ,is there a second mortgage on your home ?

[Ladynred]

The bankruptcy attorney came up with a figure, and gave us an idea of what the payment would be.. it was way out of our reach.

And I'd be willing to bet he based that number on ALL creditors filing a proof of claim and all creditors getting paid. Such is not always the case as there are often more than one creditor who do not, for various reasons, file a claim in a C h13. If they file no claim, they get NO MONEY.

You probably qualify for a Ch 7 when it comes to the median income requirements, so the question then becomes how much equity to do you have in your home ?? If you have less than the allowed exemption amount, you won't lose the house. There's no way I'd just let judgments pile up, that can be a real pain in the butt for many, many years.

[punkin]

when i posted earlier about the 3 yr statue of limitations..i failed to say i believe that is a s.c. law...also once your credit rating and fico scores have improved ,down the road,i believe you will be able to find a mortgage lender to allow you to borrow against the equity in your home ,which of course will be even greater then,of couse the loan would have to be contingent upon any liens and judgements being pd first out of the loan, in order for the lender to be able to acquire a clear title deed to your home...i know this is possible as like i stated earlier a few years ago we had similiar problems....just a thought..you might want to speak with a sub-prime lender,there are credible ones you can find through an internet search,they will even help folks sometimes in your situation...i could recommend a few sites for you to look at concerning this but i dont know if its allowed on this forum...be very careful and ck these places out with their local BBB (in their city and or state) to make certain that there are no files against them...sure wish i could help more....

[punkin]

let me know if i can post a web site for yu to visit and ck out concerning your problems...i am very new to this site and i dont want to do anything i am not supposed to...

[punkin]

in looking around i saw that others had posted recommended sites....[url]www.meclending.com[/url] and [url]www.accredhome.com[/url] are just 2 that i would check out and contact for info...remember to be consumer educated and dont let them use bait and switch tactics on you.. i am not saying that they will, but, certainly you must be careful with any company that you engage in business with...check out and educate yourself with RESPA, ( real estate protection act ) and TILA ,(truth in lending act),....lenders are required to send you a disclosure..but when it comes time to sign sometimes its completely different than the disclosure...thus bait and switch i mentioned...make certain that whatever you do is in YOUR best interest and legitimate....just my opinion ,but, if you can find a lender to help you now or in the future i would suggest a fixed rate,not an adjustable rate, its low to begin with, but ,within a few yrs you could be paying more and in some cases though less...some brokers will try to "bridge " you with an adjustable rate for now to get you through a few yrs to when your credit has improved and then you MAY be able to refi at a fixed rate....sometimes this is to your advantage ,sometimes it isnt...i know you havent got to the refi part yet, i just wanted to help make you aware of some things to think about and ponder.... i truly wish you all the best

[eacomer]

No second mortgage on home. I have equity in my home, too much it seems, just had it appraised. My house would be at jeopardy. I certainly don't want judgements against me, but at this point I see no solution to this problem. I don't want to lose my home, we won't be able to get another one before we die and don't want to take any chance of that happening.
We considered refinancing our home and also a home equity loan to pay the creditors, but again we were stopped. Those we contacted tried to help us, but the payments on them both was more than we could pay monthly, again, house would be in jeopardy.
My husbands paycheck is only enough to pay our living expenses & house payment. None left over for anything, we are living on the edge, especially since we also had to drop our health insurance. That is why the credit counselor said if she were us she would just pay the house & living expenses and let everything else go. She saw we had already paired all our living expenses down to the bone.
Ladynred-We keep looking over the repayment amount the Attorn. came up with on Chap 13 and I believe also it must have been based on paying all of it. The house was not included in the repayment amount for creditors. So unless we get a windfall of lots of money to take care of most of the money we owe it looks like we are stuck!
We have decided to try another Attorn. to see what they come up with.. At this point I don't see anyway out of this. But we will try for another opinion anyways, we have nothing to lose by doing so. It looks to me that we will have to just let the creditors file liens against the house and later down the road when things change (I sincerely hope so) we can refinance and pay them off.. I will look at the sites recommended.