Can I file chapter 13 to save my house? 14 Answers as of June 07, 2011

For past 3 years I did try to modify my loan, every time Aurora Loan Services gave me forbearance agreement that I had to complete prior to loan modification. My original mortgage payments were $1,500 and I was paying even $2,700 on this plan. I completed 5 of those, but they never modify my loan (missing doc, etc, etc.). Finally in November 2010 I had to file Chapter 13, and I surrender my house. To tell the true I didn't quite understand what I'm doing, unfortunately English is my second language. I thought that I'm saving my house. Right now the past due amount is about $40K; I can't afford to pay my mortgage trough CH13, because the monthly payment will be about $2,800. I can only afford about $1,600. When we did purchase our home in 2006 we paid for it $360 K, right now is worth about $180. I did send couple letters to the bank saying that we would like to make monthly payments, also I sent papers for loan modification again, but no response at all. Couple days ago I did receive "notice of preliminary hearing to relief from the automatic stay". Attorney who helped me file Bankruptcy is saying, that is nothing I can do to object this motion, I even can not ask for more time. Is there anything I can do to try save my house? Can I object this motion? Another problem is that at this moment I can proof just half of the income that we have, and this will be not enough for loan modification. My husband is starting new job in July, but this could be to late to do anything. I just need more time. Please help me. Thank you in advance.

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Daniel Hoarfrost, Attorney at Law
Daniel Hoarfrost, Attorney at Law | Daniel Hoarfrost
Ch 13 can be used to avoid foreclosure and cure arrearages, but ultimately the original mortgage must be paid.In your case, the house is worth less than half the mortgage debt and you can't afford the regular monthly payment, so Ch 13 would not be very useful for you.
Answer Applies to: Oregon
Replied: 6/7/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
Under some circumstances filing a Chapter 13 would allow you to save your home. Unfortunately, if you cannot include the past due amounts in your current Chapter 13 Plan, there is not going to be anything you can do at this time. Your attorney has advised you to your course of action, you should listen to your attorney.
Answer Applies to: New Hampshire
Replied: 6/7/2011
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
Without seeing your bankruptcy papers I can't really advise you on all your options, but it doesn't look like the Chapter 13 is going to work for you. If you can't afford to cure the mortgage arrearages over 60 months, and stay current with your ongoing mortgage obligations, then the mortgage lender(s) have a right to foreclose (after getting court approval).
Answer Applies to: California
Replied: 6/6/2011
Dearbonn Law Offices
Dearbonn Law Offices | Ajibola Oluyemisi Oladapo
A chapter 13 will not save your house. Your only advantage if you file a chapter 13 is the ability to pay your mortgage arrears through your chapter 13 plan. this will help you become current on your mortgage payments.
Answer Applies to: Washington
Replied: 6/6/2011
Jackson White, PC
Jackson White, PC | Spencer Hale
It is possible to save a house in a chapter 13. However, to do so you must be able to make the mortgage and plan payments. Also, the plan must propose to pay off all the arrears. It is unfortunate that you did not qualify for modification. That was probably the best thing for you. You now are stuck having to pay the high plan payment to keep the house.
Answer Applies to: Arizona
Replied: 6/6/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    First, when you're represented by counsel it's unethical for another to give advice. If you trust your attorney, then you should listen. You also say that you surrendered, which is to say you gave it up. In general, a house worth $180,000 will not catch up to its debt of $360 at any time soon, and you may be better to let it go and live somewhere for less.
    Answer Applies to: Virginia
    Replied: 6/6/2011
    The Law Offices of Alan M. Laskin
    The Law Offices of Alan M. Laskin | Jared B. Gaynor
    You need to take the advice of your attorney. J
    Answer Applies to: California
    Replied: 6/6/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    Unfortunately, from what I can see it appears that your current attorney is doing everything he can to save your home. In a chapter 13 your home can be saved, however, you must be able to afford the plan payments. Although you can strip second loans from your home with a chapter 13, first mortgages must be paid as agreed. This means that all back payments owed on the home must be included in the plan + interest and you must start making the current monthly payment. In your case, since you were never able to secure a modification, the chapter 13 plan must include all sums necessary for you to pay back everything you owe on the first mortgage over the length of the plan 3 - 5 years max and start paying the current monthly payment. Your case is very typical in that no payments were made over a long period of time as you were trying to get the loan modified. As a result large arrearages are now owing on the first mortgage. If you were able to actually get the loan modified then the bank would have simply taken those arrears and added them to the back of the loan and given you a new current monthly payment. Since you were unable to modify the loan your option through ch 13 will require you pay back through the plan all arrears. This sum is arrived at by adding up all arrears to bring the loan current and then dividing that sum by number of months in the plan (probably 60 months), adding your current interest rate to this sum and start making the original monthly payments on top of this. This is seldom is a good idea because the home is way upside down and you couldn't afford the original monthly payments in the first place let alone the additional monthly payment for arrears and trustee fees. I hope this helps.
    Answer Applies to: California
    Replied: 6/6/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Well Chapter 13 only gives you 60 months to get caught up and you have to prove you have the income to do it in that time frame. This is a classic situation where you waited too long to use the bankruptcy option and now you are too far behind. If you have good proof of the new job, you might want to try and find another lawyer to defend the motion, but you would have to prove that (1) the job is certain and (2) there is enough money to cure the the default.
    Answer Applies to: California
    Replied: 6/6/2011
    Benson Law Firm
    Benson Law Firm | David Benson
    In some jurisdictions, it is easier to work out something with the lender if you can get into mediation in the foreclosure case. If your bankruptcy lawyer does not do foreclosure defense, you should consult with someone who does.
    Answer Applies to: Ohio
    Replied: 6/6/2011
    Bankruptcy Law Office of Robert Weed
    Bankruptcy Law Office of Robert Weed | Robert Weed
    Your bankruptcy lawyer is right; as long as you are behind on the house since you filed Chapter 13, the bankruptcy judge has to give them relief the right to go ahead and foreclose. The thing you can do is to keep applying for a loan mod; especially if your husband will have better documented income soon. How fast they can foreclose you depends on your state law and there's a big variation.
    Answer Applies to: Virginia
    Replied: 6/6/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Since your attorney is familiar with your case and we're not, there's no way we can review a case file we did not see. You may not have any options, but any that you do have will be known to your lawyer.
    Answer Applies to: Georgia
    Replied: 6/3/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    In a chapter 13 you can pay arrears over a three to five year plan. However, the payments that become due after filing must be paid or else the lender can get permission to foreclose by filing a motion for relief from stay. The bankruptcy judge cannot modify your residential mortgage loan. Unless you can convince the judge to give you more time to catch up the "post-petition" payments relief from stay will be granted.
    Answer Applies to: California
    Replied: 6/3/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    You can save your house with a Chapter 13 if you can show that you can pay your arrears and stay current on post petition mortgage payments. You can strip any junior mortgages to the extent they have no equity or security in property.
    Answer Applies to: California
    Replied: 6/3/2011
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