save my home - how? ch 7 or ch 13?

[needhelp7or13]

Oregon - live and have a residence.

I really appreciate any advice anyone can give to help me out.

I haven't worked for over a year and I'm over a year behind in mortgage payments. I have a mortgage and second mortgage (line of credit) on my home. My realtor suggested that I file a chapter 7 bankruptcy to stop the foreclosure on my home - he's told me that chapter 13 won't save my home and I need to do a chapter 7. However, I don't entirely trust his advice. I was doing a little reading and saw that a chapter 13 can also help save my home, so I don't know which is right for me. I'm planning on going back to work very soon, so I'll be able to start making payments again if that's how the arrangement works.

I was trying to sell my home, but haven't gotten the traffic my realtor and I anticipated. The bank has given me two extensions on the foreclosure date to allow for this, but now they're refusing to extend it further. While selling my home would be nice, it would really set me back in life since the net money in the bank isn't very significant. I believe keeping my home would keep me in a much better position in life than cashing out and going back to renting an apartment where the rent could be more than my house payments - not to mention, the difficulty in the future of buying another home.

I have absolutely no savings at this point, nor other assets of value. Which would be a better route to go: chapter 7 or 13? If i'm not providing enough information let me know and I'll add in the details.

 

[despritfreya]

I haven't worked for over a year and I'm over a year behind in mortgage payments. I have a mortgage and second mortgage (line of credit) on my home. My realtor suggested that I file a chapter 7 bankruptcy to stop the foreclosure on my home - he's told me that chapter 13 won't save my home and I need to do a chapter 7. . .

If this is what your realtor actually told you it is a good thing you are questioning the accuracy of such statements.

If you file a Chapter 7 before the foreclosure, the Chapter 7 will force the postponement of the loss of the home for a short period of time. A Chapter 7 is not going to help you save the home. A Chapter 13 will do that. However, unless you are working or have some other source of income you will lose the home anyway. In a Chapter 13 you would be required to resume regular monthly payments to the lender(s) and propose a Chapter 13 Plan that cures the pre filing default by making monthly payments to the Chapter 13 trustee. If you have no income you do not qualify for a Chapter 13 since you cannot show that you have the ability to pay.

I suggest you meet with a local attny. Consultations are usually free.

Des.

 

[needhelp7or13]

Thanks for the response!

I'm under a deadline to file that is way too tight to delay right now. So, I'm going to have to file the chapter 7 pronto just to put a stop to the foreclosure, then start doing some homework and consult an attorney very soon. From what I understand, a person can change from a chapter 7 to 13 or vice versa. I don't have work right now, but I will be working again very soon, so my situation is very likely to change after filing. So as I understand it, I'll have some additional time to find a buyer for the home after the initial filing, or if I don't have an acceptable offer and I'm back to work, I could try to do a chapter 13.

Does it sound like I understand things correctly?

 

[despritfreya]

Assuming your case does not get dismissed relatively quickly - meaning you have filed all required documents timely - in general, a Chapter 7 will delay the loss of the house 1) until the lender files a Motion For Relief From Stay and that Motion is granted; or 2) the entry of your Discharge and the closing of the case - whichever happens 1st.

If you manage to convert to a 13 before either of the above happens but do not resume the mortgage payments you may delay the loss another 30 to 60 days but not much longer.

Regardless of which Chapter, my guess is that filing bk will buy about 60 days before the stay gets lifted as I suspect the lender will file the Motion to lift the stay within 30 days of the filing. You may then get another 30 days before the foreclosure is completed - this depends upon normal local procedure for the lender.

You really, really, really need an attny.

Des.

 

[FlyingRon]

Never accept legal advice from real estate agents. You need an attorney. Note that if your intent is to sell, bankruptcy is not going to help you much. Once bankruptcy starts, you're not allowed to sell without specific approval from the court/trustee. It will make it even harder to do.

The term is actually REALTOR and is a trademark. It's not a synonym for real estate agent.

My suggestion:
1. Continue working with the bank.
2. If the listing contract has expired, get a competent agent.