Is there any way to keep your home with a Chapter 7?

[Anonymous]

At worst, I would expect him to look up the guidance on what dependent expenses you can include on the means test, and get back with you. Someone on this forum may have the knowledge about this. 

The bigger question to me is your options with the non-exempt home equity. 

Did the attorney say why he didn't think he could get you in a Chapter 13 bankruptcy? 

[Anonymous]

I actually spoke to my lawyee because of what you said and research I have done in the past. I’m likely not going to reaffirm. I am sorry for the snippy answer. I’m having issues lately. Lol.

I had brought not reaffirming up in the past because of everything I read, but I asked his advice on it. At the time, I also asked about reaffirming on Chase for my credit card because I know it’s difficult if not impossible to get back in to them once burned. I am burning them for 2k. I said I was including like EVERYONE in the bankruptcy and I worried about my ability to repair my credit if I cannot get cards anywhere. He said reaffirming would the best way to rebuild and didn’t really say more on it probably because I asked for advice. Later, my mortgage company completely closed it on my credit report which i also contacted him about and he said they’d put it back on when it was discharged. This company is so bad about communication. I still haven’t heard back on a tax issue they dropped the ball on and they STILL haven’t done a reaffirmation agreement despite taking the loan off my report and reporting it as IIB. They also, bizarrely, started sending all my stuff to my lawyer which he has asked them to stop and he asked me to ask them to send the things to me. An escrow overage check was sent to him as well as my statements since I filed.

I told the lawyer today that literally the only positive I could find to reaffirming was a positive reporting on my report and, up against everything else, that doesn’t seem worth it. I have my doubts my company would even keep reporting and I’d never be able to get through to them to fix it. He said he hasn’t heard of anyone not having it reported again and said people who haven’t reaffirmed have some issues making payments and communicating with the company. But he admitted the communication thing is already an issue. And I have still been able to make my payments normally even though they removed it already. He told me I don’t have to reaffirm if I don’t want to and to think about it and let him know. I do trust him. The office has been open decades and I know other people who have gone through them. He’s also third generation in that office. I typically don’t question lawyers or doctors if at least half of what I read jives with what they’re saying but in this case, he is literally the only person saying I should reaffirm.

Chapter 7 makes the most sense for me because all my debt was credit card debt. 19k. I make 28k a year so I was drowning. I bring home a lot less after paying for my benefits and getting slammed with taxes. I am single with no kids so they don’t take it easy on me. Lol. My mortgage never fell behind, I own my car outright, and my student loan is up to date. (I know they cannot be dismissed but my mother had a repayment plan in her chapter 13 for a student loan she fell behind on.) My whole thing was irresponsibility and bipolar disorder that wasn’t properly treated for awhile. I just wanted to start over so no chapter 13.

I probably won’t reaffirm because, as I understand it, I won’t lose the house or my rights to it as long as I make my payments as agreed. It seems insane to reaffirm. I probably wouldn’t have questioned it again without your comment so thanks!

[Anonymous]

He didn't really say much about the equity in my home, because he immediatly said I wouldn't qualify for Chapter 7, and I guess the home equity wouldn't be an issue in Chapter 13.  What he did tell me was, after doing the means test, it showed that I would have $1800 a month as disposable income, so that would probably be my monthly payment if I ever qualified for a Chapter 13.  I WISH I had $1800 left over every month, I certainly wouldn't be exploring a bankruptcy option if that was the case.

[Anonymous]

I would recommend completing the means test yourself, making some assumptions about what is allowable, if it's not clear, and then using that as a starting off point for future meeting with attorneys.

[Shooting-For-800]

Every state is different.  See your state rules.

Some states allow you to keep a $500,000 house but not a $5,000 paid off car.

OP - a lot of people do not realize that there may be options to "buy back" anything that is not exempt in BK.  In other words the trustee may allow you to pay $100 per month for 50 months to "buy back" an extra $5,000 in equity/items that are not exempt.

GL!

[Anonymous]

That is the exact reason why you want to work with an attorney who has experience negotiating with the trustees. He or she would likely know to suggest ways to buy out your non-exempt equity. Of course, if you're able to get an appraisal that suggests you have no non-exempt equity, that would be better.

[Shooting-For-800]

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@Anonymous wrote:

I have a first consultation with a lawyer tomorrow to discuss my options, but I'm trying to find out if there is anyway, if I do file Chapter 7, if I can keep my home.  I live in VA, I'm a single mother with 2 teenage boys, 1 about to go to college and I work full time.  I am currently enrolled in a debt management program thru National Debt Relief, my monthly payment to them is $1142.00, I have been in that program for about 6 months, and I'm struggling to keep up, I have very little left over every month, no savings, and no way to finance any emergency that may come up.  I would only file Chapter 7 if I can keep my home, because I would have nowhere else to live.  Mortgage is current and paid on time.

Quick overview of my current situation; 

Monthly Income (after tax) $5,335.00

Monthly Expenses (including current debt) $5,130.00

Current amount of unsecured debt $60,000

Equity in home (ballpark) $50,000

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WOW, VA is really bad for homeowners.  $5000 exemption on home equity but $6000 exemption on car equity???

VA is last in the country for homeowner protection.

Sorry, I do not see you being able to file Chapter 7 even if you did not have a house.

Your income is HIGHER than your bills.

What is your debt from?  Credit Cards?  Loans?

ANYTHING besides student loans and mortgages can be negotiated.

You can get credit card balances that are more than 90 days past due settled for 10-50% of the balances.

You can get interest rates reduced.

You can get payment plans reduced.

You can just quit paying and ruin your credit with out filing Chapter 7 and ruining your credit (and paying a lawyer)

Once your debt gets to a point where your creditors think they will not get paid, you have much more power.

It all depends on what type of debt.

BTW, a well construction form letter stops all the phone calls by law.

Share any more details with us?

[tooleman694]

This is screaming chapter 13 to me, time for a super budget. Its hard but you can make it.