@VegasUnderH20 wrote:After much research, I find that a CH7 will address my situation best, in the goal to dispose of an underwater property with as little impact as possible to my FICO. However, I do have some questions remaining and hopefully I can obtain some info in this forum:
Current situation:
- FICO approximately 800+
- No credit card or other consumer type installment debt
- Only debt is mortgage on upside down Nevada home.
- I will make October 1st mortgage payment on time. I intend to file CH7 on Oct 2nd.
Questions:
- It is my understanding that clean bankruptcies such as mine will be adjudicated in 90 days. As the November and December payments will be extinguished by the BK, legally, I will not owe those payments. Question - how will the mortgage company report those non-payments (after filing but before adjudication) to the CRAs? In essence, if I don't owe them, can they report them as missed payments?
- After adjudication, I intend to continue timely payments on HOA and hazard insurance. Although I'd like to vacate the home, I will probably stay as long as necessary until the lender removes my name from the title. Can anyone explain WHY the lender must go through the foreclosure process when I'm perfectly willing to convey the property back to the lender. In other words, what, if any, advantage does the lender have by foreclosing instead of offering a deed in lieu??
- In past years, I've heard and read numerous stories of lenders not even sending the notice of default for a year, two, or more in some cases. Is this still happening or are foreclosures getting back on track, i.e. notice of default sent on time, etc? If it's any help, my servicer is Green Tree and the loan is owned by Fannie Mae.
Thanks in advance for any help anyone may provide!!
DO NOT FILE CH7 for what you want to do. In NV that is the seriously wrong move. You need to hire an attorney and get the thing short sold. Let me repeat... with your goals/situation DO NOT file a ch7.
IF and only IF your attorney can't get you a deficiency waiver, then you might want to consider a bankruptcy, but even then, probably not.
Here are some reasons, just for fun:
- BK7 goes in the public record section of your CR, SS just pays/settles/zeros your tradeline
- BK7 stays on CR for 10 years, impacting you the whole time, SS is there for 7, with the impact lessening over time, after 3 years you barely feel it.
- Once you file BK7, you can't file again for 8 years... if the shiz hits the fan and you wind up with $500K medical bills, you're pooched. <-- I have personally seen this happen.
- If you qualify for a BK7 (in NV <$48K/year), you will most likely qualify for a full-deficiency waiver short sale; and they'll probably give you $3K in cash-for-keys money.
- With a BK on your report, your FICO doesn't matter. Seriously, it doesn't matter at all, what matters is the BK. For example, look at the scores in my sig. I would be denied outright for Chase, Citi, Amex specifically because of the BK.
- If you file BK7 in NV, you MUST include ALL OPEN TRADELINES regardless of whether you owe on them or not when you file. This means all your creditors are notified, and 99% of them will instantly close your accounts anyway.
- Do you own anything other than the house? Maybe a car? Some stocks? a Painting? Guess what? The BK trustee will take them all. (with a minor personal exemption).
PLEASE do not file a CH7 BK. Go talk to a full-service debt relief law firm in NV (not a bankruptcy mill). Make sure they have a BBB A+ rating (there are 2) then look at their complaints\testimonials\reviews etc... heck, schedule Free consultations with both of them... make certain you are meeting with one of the firms' REAL attorneys. Ideally, you meet with one of the guys you see in their commercials. They own the place, and it's their reputation on the line. You want to make sure you're talking to them and that they're the ones working on your case.
If you have any more questions, feel free to ask. Don't file a CH7 though!
Cheers,
-SM
Starting Score: ~470 preBK(8/2010)Also, if you BK in NV, and surrender the house, you're going to have to SS anyway... the banks aren't taking the BK repos, so it will sit on you for a couple years until the Trustee gets around to selling it (or gets it closed). Only then will you not have liability for the dwelling, and only then will the "i can buy a house in 3 years after an SS" clock start ticking.
This is what's screwing me now, I'm 3 years post BK, but the SS is only 10 months old. Can't get a mortgage despite my scores/rebuild. Grr.
-SM
@VegasUnderH20 wrote:Thank you for your input. As mentioned, I've done all the research and agree with everything you've stated. However, if I take the short sale route, I would need to continue making these payments while the short sale lawyer/realtor and the lender play their back and forth games (which could stretch out for many months) Net result, I'm down another $18k. In the alternative, I'll make one more payment and then I'm through with the payments. I can stay in the house until the bank decides that they would like to have it back (this could take much time, but in this case I'm $18k to the good)
As to the need for credit, I'm at a stage in my life where I simply don't need it. I'm not in business anymore, I can obtain a credit card in one of my children's name in the event I need to rent a car, travel, etc. So I'm really not concerned with that aspect of the bankruptcy.
Also, it is my understanding that during a short sale agreement, lenders have frequently started foreclosure proceedings and that would create a big mess. Back to my original question - what happens to the payments that I miss during bankruptcy (since they are extinguished by the bankruptcy, are they reported?)
No. If you're short selling, you stop making payments the instant you decide to short sale. If you have an attorney doing it for you strategically, you can stay in your house a whole lot longer than 18 months. In fact, after 10/1/13, a bank can't foreclose on you while you have an attorney working (actively negotiating) your case... it's going to gum things up again. (I'm referencing SB321)
I don't know what idiot realtor you've been talking to, or website you've been reading; and I WISH I could recommend a law firm for you to go talk to, but I can't. The mods won't let me.
I am not answering your questions about bankruptcy, because you shouldn't file it. As much as you think you know, you are seriously misinformed about SS and/or BKs. And really, I literally take 3-4 calls a month from someone who filed BK w/ some mill-firm to dump a house, then wound up with a premature birth, broken leg, etc... who now needs to file BK but can't. They wind up garnished into the poor house.
Yes, I'm taking a firm stance on this. BK, for you, should be completely out of the question. In fact, if you find a lawyer who will do it for you here in Vegas; let me know who you got, because I'll file the sanction request with the NV Bar myself. No ethical attorney will touch this case as a BK. An ethical attorney will recommed a straight SS or a strategic SS long before even considering a BK.
-SM
@VegasUnderH20 wrote:That's the point - I may be stuck in the house for an indeterminate amount of time, but at least in the BK route, I will be stuck with only the HOA and insurance payments.
Buying another house isn't an issue for me, I won't be buying another house.
The same thing is true of a strategic short sale, except the insurance... if that's part of escrow, you don't pay that.
-SM
I did have a consultation with a short sale attorney and he did mention the homeowner's bill of rights, but I did not know what all it included. I just read some summaries of the law - so I thank you for bringing it to my attention again. Indeed, the items that I've read, specifically regarding to "dual tracking" changes the game. I'm going to continue reading about the new law. 
Yeah, sorry I'm being such a jerk today... I've got a terrible cold.
But here's the basic deal; if you go to a BK attorney, they'll sell you a BK. If you go to a SS attorney, they'll sell you an SS. That's why I recommended a full-service debt relief law firm. There are literally only 2 in Vegas that handle Loan Mods, Short Sales, Debt Settlement, Bankruptcy, 2nd settlements, and AB149 mediation that also have BBB A+ ratings and have been around through the whole fiasco we have here.
Also, if you spoke with a real estate agent's in-house attorney, that attorney is looking out for the rights of the real estate agent, not you.
As I was thinking about this, I almost thought you might be a friend/colleague/competitor of mine who was messing with me. I mean, they all know that this is the kind of thing that really gets under my collar... people filing BK when they shouldn't be. In fact, I'm still not sure that you aren't someone I know messing with me. (Especially since you brought up "dual tracking" on your own and I was talking about SB321 earlier today with someone who's reading every single word and writing a synopsis.)
Regardless, go talk to more attorneys in town. You'll find the right answer... and like I said, make sure you're talking to one of the firm's partners. They'll actually have a stake in your case. If you're talking to a paralegal or salesperson, just get up and leave.... they won't know as much as we do here on the forums. Plus, a law-firm's owner should make time for you if they really care about you as a client.
Cheers,
-SM