Help Have to file Chp.13 to protect house

[Anonymous]

Hi

New here.

Was rebuilding credit slowly and doing ok. Up to 600 on my own.

Two and half weeks ago we got a letter threatening foreclosure in two weeks on a "second mortgage" that we thought was a loan 18 years ago!

Quick recap, we were young, trusted someone we shouldn't have, we got a house to raise our four kids in. Deed says the house was sold for 61K and our loan with CIT was for 61K.  We did sign some other paper but we thought it was a loan for "down payment"  for around 18 grand.  We were supposed to pay 155 a month, the guy always asked for cash and would never give us an address to send it to. My husband had to find him all over the city.  After about two years of meeting in bars, parking lots, etc he got tired of it and said you know where we are and we will pay you in a check.  Well we never heard from him again.  

About ten years ago my husband last his job and we went on a program with our state to help pay our mortgage. (it is just a 1,000 square foot house, small mortgage)  We told them about this loan out there and they couldn't find it. They said probably one day you will have a lein on your house when you sell it.

Fast forward to two weeks ago, the guy came out of nowhere with a certified letter stated we had 2 weeks to pay 18, 500 or be foreclosed on.  THIS guy did NOT file his mortgage until 2017 with our county!  He sat on it, all other paperwork was filed, the deed and the other mortgage in 2001. 

We went to a lawyer, he suggested a bankruptcy to protect the house from this guy.  We are up to date on all other creditors. We live within our means. 

We have cars we paid cash for, 1999 and 2001.  We have all our kids in college and beyond now. I was working to get credit cards because we had none for years to build up to refinance our mortgage.  My score via credit karma is 603.  I wasn't even going to check anything else til I saw it hit 640. 

SO my fear is the "disposable income". Our income varies, and sits around 3 grand a month maybe 4 if we have a good month. We are indep. contractors and work depends on what work the companies we work for have. 

I don't know if we have to pay 500 a month or 1,000?  Like how does this work?

Will we have money to buy tires, fix a car, fix the fridge, etc?  We pay most of our stuff in cash, few credit cards, almost always used appliances but if they take all our "extra" how can we be ready for the emergencies? 

We have to put down all our stuff this weekend, take the classes and meet with the lawyer next week to begin the process.  We have the fee to file and the initial 450 he wants.

We live in our means, only use credit cards to rent cars etc for long trips since ours are old.

NOW all this happens and we have to quickly file to avoid this guy taking our house after 16 years of not talking to us.

HE was shady, we learned our lesson but now we are in this pickle.  We don't want to have to file but we HAVE to.

ANY advice or settling of my nerves would be great.

We get it, we will not be able to rent a car without the cards, We know they will all close on us during this but I HATE it because we don't want to do this and ruin what little credit we have built up. But we will keep the house in the long run.

Some of ya'lls payments are WAY out of league!

(most of our debt was old medical bills and school loans we defaulted on made our credit score low and not having credit cards)

[Shooting-For-800]

I doubt you can be foreclosed on without late notices, etc.

what about refi the house?

foreclosure is a process, not an appointment.

review you states laws and the paperwork you signed.

you must have equity in the house.

Sounds like you got wrapped up with a real sleeze ball.

GL!

[pizza1]

Heres the deal....you need an attorney for this stat! This is all kinds of shady, and in order to be foreclosed on, the "lender" has to go thru certain steps, and theres has to be a process. Contact an attorney now for legal counsel to advise you....This is getting into a lot of gray area. Im not kidding when I say contact an attorney today.

[Anonymous]

We have the attorney.

He states this is the only way to save the house.

We are not able to refinance the house in time. I talked to someone that would want to raise our scores then refinance and that would take a few months.

There has already been a server at our door scaring our daughter when we weren't home.

We have no time and nothing to do but let the attorney do what he does and file chapter 13.  As of today we have about 17 days left.

I just don't get how we will have money for emergencies.  Are we allowed to put that in our budget?

It was shady and we didn't understand what we were doing but since we signed we are in it now.  He came after us 15 days before the statutes of limitations ran out on his end.  Our attorney wants us fight and file chapter 13 and 7 and 13 to the point that the second mortgage will be stripped.  I just want to stay in our house and try to pay back something we can afford.

[despritfreya]

I agree with the prior posts.  You indicate you have spoken to an attny regarding bk.  I recommend that you consult with more than one attny. 

My guess is that the 2nd is a carry-back from the seller.  Look at the loan documents.  Did the note mature on a date certain?  If so, maybe there is a statute of limitations defense.  Further, check to see if your State has a "time is of the essence" statute.  If so, the failure to enforce payment may be a defense. (Please note that the loan document may waive a "time is of the essence" requirement.)

You do need a good attny.  If this loan has not been paid for so many years you may not owe just $18,500.  You may owe the principal plus all of the accrued interest over the many years of non-payment. 

As to the Chapter 13, your Plan payment will be based upon many factors, including your ability to pay and the total funding needed to pay creditors.  Only you and your attny can determine what your budget will look like.

Des.

[Anonymous]

Thanks yall.

We took the letter to an attorney first with all the other paper work and all he said is yep you signed it you owe it call them and work out something.

This was the second attorney we took all this to.

At this point we don't have any time left to take it to someone else.

Even the refinance people said yea you need to stop the foreclosure quickly and the best is a chapter 13.

I am poor, I don't have anything or know anyone else to talk to.

We have very little in our cash savings.

I am stuck.

Everyone we talk to thinks even if we made a deal with him he would regnig at closing and to be honest since he moved before the "deadline was up" on the first letter we believe this to be true.  He will do whatever he can to "make a deal" and then go back on it.

Thanks for the replies~  I don't know how to talk directly to yall yet but thanks!

[Shooting-For-800]

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@Anonymous wrote:

We have the attorney.

He states this is the only way to save the house.

We are not able to refinance the house in time. I talked to someone that would want to raise our scores then refinance and that would take a few months.

There has already been a server at our door scaring our daughter when we weren't home.

We have no time and nothing to do but let the attorney do what he does and file chapter 13.  As of today we have about 17 days left.

I just don't get how we will have money for emergencies.  Are we allowed to put that in our budget?

It was shady and we didn't understand what we were doing but since we signed we are in it now.  He came after us 15 days before the statutes of limitations ran out on his end.  Our attorney wants us fight and file chapter 13 and 7 and 13 to the point that the second mortgage will be stripped.  I just want to stay in our house and try to pay back something we can afford.

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I would call every mortgage company on the internet to find a solution.

HELOC, refi at any rate, etc.

Chapter 13 is not going to strip your 2nd mortgage.

Chapter 13 is going to make you pay most if not all of your debt over the next 3-5 years.

You can not come up with any money to delay this guy?

Have you tried to negotiate with him?

Did you tell him you are going to file for BK and he won't get his money any time soon?

Can you join PenFed or NFCU?

If so, do so and apply for credit cards ASAP.

They have been know to give large limits to people with average and below average credit scores.

You can't find ANYONE that will loan you the money for less than a year to refi?

I find it insane to file Chapter 13 if this is your only debt.

Why can't you file Chapter 7?  Is your home exempt in your state?

You can fight the foreclosurer and drag it out.

I will interview a few new lawyers.

You can stop forclosure dead in its tracks by filing the day before the auction day.

I would do everything I could until then and then file as a last resort days before the deadline.

I would try to negotiate with the guy.  Give him $3k for 90 days or something.

The real question is...is this the only reason you need to file for BK?

[Anonymous]

You can not come up with any money to delay this guy?  No we have about 500 dollars in savings and again i believe he would screw us over even if we tried to negoiate with him.  He is a liar and a scammer.  I have no one to fight with us. I know no other lawyer.

Have you tried to negotiate with him? No we have no way but this attorney who is going to call on our behalf to his attorney next week after the holiday

Did you tell him you are going to file for BK and he won't get his money any time soon? That is going to happen next week

Can you join PenFed or NFCU? We have no military in our family to be able to join.

If so, do so and apply for credit cards ASAP.

They have been know to give large limits to people with average and below average credit scores.

You can't find ANYONE that will loan you the money for less than a year to refi?  The one I talked with said it would take 2 or 3 months so I don't think that is enough time to stop the foreclosure.

I find it insane to file Chapter 13 if this is your only debt. Not our only debt but the only one we can't pay in 12 days or 20.

Why can't you file Chapter 7? Is your home exempt in your state? I am unsure about all that but I do believe the "equity" in our home would be too much to file and we would still loose the home is what I understand.

You can fight the foreclosurer and drag it out.  This lawyer fights foreclosures and does bankruptcy. He said it would be cheaper to file bankruptcy tho.

I will interview a few new lawyers.

You can stop forclosure dead in its tracks by filing the day before the auction day.  I don't know who to talk to to do that or how much it would cost us.

I would do everything I could until then and then file as a last resort days before the deadline.

I would try to negotiate with the guy. Give him $3k for 90 days or something.  We don't have that kind or money or access to that kind of money. My mom lives in a nursing home, my dad is dead. My sister would not help me.  I litterally have no family and neither does my husband with access to that kind of money.

The real question is...is this the only reason you need to file for BK? YES this is the only reason to file because my understanding it would stop the foreclusre he filed out of nowhere and we would have time to pay this debt. We are not late on anything else besides the normal maybe 15 days here or there but not over 30. (except student loans)

[Anonymous]

We had to file Ch13 after months of trying to work with our mortgage company on a loan modification - ALL of our other bills were up to date. My advice is to go ahead and file.  We had an excellent lawyer who not only got a loan mod deal in place quickly, he also arranged a repayment plan back that was approximately 9% of our total debt owed.  We paid over 5 years which is the MAXIMUM amount of time.  One word of caution, if you get 3 years - they can extend the plan to cover the full period of 5 years.

They will base your payment on the amount of disposable income left AFTER expenses including your mortgage.  For us, while it was tight initially, it wasn't overly burdensome.  We were able to save emergency money even while in active 13 which helped because we were able to cover this like a boiler replacement emergency (heat is important during the winter!) and car issues.  If you are used to paying cash, this will actually be more of the same with 2 bills (trustee and mortgage).

I will stress though that Ch13 is needed when facing foreclosure or similar legal issues.

[Anonymous]

Thank you for your  help. BKSurvivor19

It is hard to know what to do with the person telling you want to do is making money off of you too.

He seems legit wrote a book about all of it.  Isn't one that advertises all the time and his  admin. was very angry at our situation.

  We can't afford to fight then file bankruptcy too.   At this point it is one or the other.