Quote:
Originally Posted by toneman
A month ago I filed for Bankruptcy, and qualified in every way for chapter 7; all of my possesions, including my home, were exempt from being sold; but my attorney said that just because I was a few months behind on my mortgage, I had to take chapter 13. The trustee paid what I was behind on the mortgage, and the judge orderd me to pay my mortgage fully each month after, even though he knew full well that my finances were not enough to do so; and now my home is in danger of being forclosed upon. What can I do to keep my home? I am able to make the monthly payments to the trustee; can I ask that my mortgage be added to the payments? I have not gone to the crediters meeting yet, can I ask about this then? Will changing from chapter 13 to chapter 7 help? Is the judge ordering me to pay my mortage even though he knew full well that I couldn't afford it even ethical? Can I sue him for this?
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The new bankruptcy laws that took effect in October of 2005 made it more difficult to file a bankruptcy than before. I'd ask your attorney specifically what those laws did to make it necessary for you to file for a Chapter 13 instead. Typically (and I do say
typically) the past dues and arrearages on a mortgage are included in the bankruptcy while the usual monthly payment is made "outside the BK," in your case on your own. By the time someone decides to file a Chapter 13, that can amount to thousands of dollars. There are those, of course, who can't (or in some cases,
won't) make the payment on their own and if that's the case, the entire outstanding balance (along with arrearages) can be included in the bankruptcy. Only your attorney can say with any certainty if you can reorganize your debts
with trustee approval at this late date. It may be that your situation has deteriorated to the point that it can ... only he/she can help you make that determination. It certainly doesn't hurt to ask, in my opinion.
Whether or not to convert a 13 to a 7 is something you and your attorney should decide between the 2 of you. Generally speaking, a Chapter 13 bankruptcy involves a 5 year repayment plan while a Chapter 7 completely discharges you of all debts included in the BK. When it comes to trying to borrow money in the future, it really doesn't matter from a credit standpoint. Years ago, it did weigh favorably to try and repay the debts in 13..nowadays, credit decisions are pretty much an electronic decision. Computers don't know the difference between a 7 and a 13. A bankruptcy is a bankruptcy. It doesn't carry quite the "stigma" it did at one time, but it does have an effect on your credit history.
I
can assure you that the credit "clock" starts ticking with the date of discharge, regardless of it being a 7 or 13. Both types can remain on your credit history for up to 7-10 years from date of discharge. Typically, you'll have difficulty getting credit ... or buying a new home .. for
at least 2 to 3 years from the discharge. (This is not credit advice..this is a part of credit standards of the financial industry and I'm passing along a few "pointers" just for your information.)
As far as trying to save your home from foreclosure, you can always attempt to work out a forebearance with your lender. No guarantees .. it's a very bad market now and foreclosures are at an 'all time high.' On the other hand, most lenders don't particularly want the expense of a foreclosure and may be willing to work out some sort of agreement. Again, there are no guarantees here, but again, it never hurts to at least ask that one as well. (Again in my opinion.) At the very least, it shows your lender that you're willing to try and repay the loan, and not just simply "walking away." (That does make a difference, but it may not alter the outcome.)
The following link (from the LegalMatch library) can also help explain some details regarding a Chapter 7:
http://www.legalmatch.com/law-librar...y-lawyers.html but ultimately, this decision should be decided between you and your attorney.
Hope this helps. Good luck.