If we convert from Chapter 13 to Chapter 7, will we lose our home? 18 Answers as of June 03, 2014

We cannot afford the trustee/mortgage payments, bills, cost of living for a family of 6, etc. My husband is active duty (USN). Is there any other alternative to foreclosure? Thanks!

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David R. Fondren, Attorney at Law
David R. Fondren, Attorney at Law | David R. Fondren
This is probably to complex to be answered in an email. You need to speak to your attorney about this. First, Why did you file the 13 in the first place? means test? foreclosure? Other Assets not exempt? Each has their own consequences. If foreclosure, was your income ever enough to cover expenses. Did anyone ever teach you how to make a budget and live with it? Second, Why can't you continue making payments? loss of job/hours? death/sickness/disability? What circumstances have changed? Was husband on active duty when you filed? Anything else? Third, How much equity is in the house? Can a chapter 7 trustee liquidate it? Fourth, Will the soldiers & sailors relief act stop a foreclosure while on active duty? That I don't know. I don't want to guess. You should speak to a JAG officer for that. Fifth, Have you looked into HAMP? Home Affordable Modification Program. It does not work for everyone. You can pursue it while in the 13. Sixth, I don't know what you have or have not done. So I will toss out some ideas. What can you cut from your budget that you have previously considered "essential". Many of my clients consider their cable/satellite a necessity. There is free digital tv on the airwaves and free movies to checkout from the library. 10 years ago, few of us had phones. 20 years ago hardly anyone did. Everything in the budget has to be "on the table" and subject to the axe. Do the children have to be in every activity? How often do you eat out or get a cup of coffee at a coffee shop? Do you smoke? Drink? fitness club? Walking is free. How do you organize your trips to the stores? Jump in the car each time you think you need something? or, make a list and do them all in one trip? How much food gets thrown in the trash? How much stuff gets thrown away not because it is broken, but, because it is out of style. We can learn a lot from our grandparents and great grandparents who lived in the depression and WWII. They had to: "Use it up, Wear it out, Make do, or do without". Keep in mind that keeping a roof over you and your children is more important than some of the other "things" that will also disappear if you lose your home. go to crown financial ministries at crown.org. they can teach you how to make a spending plan that will work and be livable.
Answer Applies to: Missouri
Replied: 6/3/2014
Stephens Gourley & Bywater | David A. Stephens
If you are behind on your mortgage you could lose it in chapter 7 unless you can modify it with the company which holds the mortgage.
Answer Applies to: Nevada
Replied: 5/7/2014
EDWARD P RUSSELL | EDWARD P RUSSELL
Ch 7 will not help you in paying for and keeping the home. You should work with the mortgage company. They probably hardship programs.
Answer Applies to: Minnesota
Replied: 5/6/2014
GARCIA & GONZALES, P.C.
GARCIA & GONZALES, P.C. | Richard N. Gonzales
Not really. The bottom line is this: If you want to keep the home, you have to stay current with your Chapter 13 Trustee payments and your regular mortgage payments, post petition. If you convert to a Chapter 7, you will be required to surrender your home. Perhaps you can stretch out your payments over 60 months (assuming you are in a 36 or 48 month repayment plan now). You really should talk to your Chapter 13 attorney for advice. If they are unavailable, contact an experienced bankruptcy attorney, and pay them to look at your file and discuss options.
Answer Applies to: Colorado
Replied: 5/6/2014
Scott Goldstein | Scott Goldstein
It is very likely that you will lose the home.
Answer Applies to: New Jersey
Replied: 5/6/2014
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Chapter 7 is an option if you are current on the mortgage payments and there is no non-exempt equity for the chapter 7 trustee. You also have meet the income requirements. A family of 6 on military pay? You need a second opinion on the amount of your plan payment.
    Answer Applies to: California
    Replied: 5/6/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    There are too many missing pieces of the puzzle to be able to answer your question. Were you behind on your mortgage? Have you applied for a loan modification? If you receive a loan modification, by how much would your payments need to go down to let you afford to resume payments? Are your needs for a modification realistic? Do you have equity in your property? Have you talked to a local realtor about selling or short selling the property?
    Answer Applies to: Nevada
    Replied: 5/6/2014
    Danville Law Group | Scott Jordan
    There may be ways to save your home, even in a Chapter 7. You will need to discuss with your bankruptcy attorney. If you are not represented, please consult with a local bankruptcy attorney for assistance.
    Answer Applies to: California
    Replied: 5/6/2014
    Patrick W. Currin, Attorney at Law | Patrick Currin
    In bankruptcy you can pay your back mortgage over time but must be paid up on current charges.
    Answer Applies to: California
    Replied: 5/6/2014
    The Troglin Firm | William M. Troglin
    Not knowing why you had to file a Chapter 13 instead of a Chapter 7 to start with I can only make the presumption that you were past due on your mortgage. Generally speaking you can file a Chapter 7 and keep any secured property that does not have excess equity (unprotected equity) as long as the debt is current. You can also look at amending the Chapter 13 Plan to reduce the payments. You need to speak to your attorney or if you filed the case pro se you need to speak with an experienced bankruptcy attorney.
    Answer Applies to: Georgia
    Replied: 5/6/2014
    Charles Schneider, P.C.
    Charles Schneider, P.C. | Charles J. Schneider
    There is not nearly enough information provided to answer this question. The answer should be provided by the attorney you hired for your Chapter 13.
    Answer Applies to: Michigan
    Replied: 5/6/2014
    The Law Office of M Grater LLC
    The Law Office of M Grater LLC | Mark O. Grater
    You Have an obligation to make your mortgage payments on time no matter which chapter you file under if you want to avoid foreclosure.
    Answer Applies to: Connecticut
    Replied: 5/6/2014
    Law Office of Stuart M. Nachbar, P.C.
    Law Office of Stuart M. Nachbar, P.C. | Stuart M. Nachbar
    This answer pertains to NJ law.It will really depend on the equity situation on the property and the arrears (how far behind in payments you are). If there is little equity the Trustee will normally abandon his interest in the Property. Also, NJ, we have a loss mitigation/loan modification program through the Bankruptcy Court.
    Answer Applies to: New Jersey
    Replied: 5/6/2014
    Law Office of Shawn N. Wright | Shawn N. Wright
    When you say "lose the home", if you fail to make your mortgage payments, then yes, the bank can foreclose on your loan and take the property (eventually) to a sheriff's sale. You should immediately contact the Loss Mitigation Department of your mortgage company to discuss a mortgage loan modification. They might be willing to give you a reduced payment for a while, or a reduction in interest rate, etc. It all depends on the bank and your circumstances. Be prepared to contact your mortgage company frequently, such as 3 to 5 times a week, to ensure that they give your modification application sufficient attention.
    Answer Applies to: Pennsylvania
    Replied: 5/6/2014
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    Doubtful, the real principal is you cannot have what you cannot afford, bankruptcy or not.
    Answer Applies to: Michigan
    Replied: 5/6/2014
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    You may be able to modify your loan or qualify for one of the many government programs. See a housing counselor. They are free all over Michigan. Otherwise if you dismiss your ch 13 or convert toCh.6 and you are not current on your payments, they are very likely to start foreclosure proceedings pretty quickly.
    Answer Applies to: Michigan
    Replied: 5/6/2014
    John Ceci PLLC
    John Ceci PLLC | John Ceci
    I cannot answer that question via email. You need an attorney to evaluate your situation by getting an understanding of your current situation and looking at the relevant documents.
    Answer Applies to: Michigan
    Replied: 5/6/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    The lender can not foreclose on active duty military but that does not mean that the lender can not foreclose when you are no longer active. The arrears for not paying the mortgage will still accrue. Chapter 7 will not take your home unless there is equity above the exemption amounts.
    Answer Applies to: New York
    Replied: 5/6/2014
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