Urgent bankruptcy question

I am actually in the process of contemplating bankruptcy. I have spoken with an attorney and have been told that with chap 7 as long as you don’t have equity in your home you can keep it if you stay current on the loan. I go to have another meeting next week so we shall see then.

I also need some advice for my nephew. He is in foreclosure on his home. Sheriff sale is May 6th. I tried to help him refinance but no bank will touch it at this point. I was told his only way to hang onto his house is to file bankruptcy. Any idea what he should file? chapter wise? How long will it take? What can he keep? How much does it cost? We are in NJ. Thanks.

2 suggestions:

  1. Get one of the nolo books on bankruptcy from the library. Find the books at www.nolo.com
  2. Check out the website www.legalconsumer.com

Did your nephew lose his job? How is he struggling paying his house? Does he have alot of CC debt? What are some of the issues with him being in such financial problems? Bankruptcy usually isn’t the answer all the time. IF he can’t afford the house and files bankruptcy to keep it, that doesn’t make much sense. Give us some more information on his financial situation, and maybe we can help.

Sometimes people can afford to pay their secured debts but not their unsecured debts which is my situation. Bankruptcy might be an answer as you can usually keep your secured property in bankruptcy unless you fail the means test and can’t come up with a chapter 13 plan.

No, he did not lose his job. He just got behind on his mortgage. He works with my brother 1 1/2 hours from his home so he stays in the town he works in from Monday to Friday and goes home on the weekends. His wife took care of the bills and hide the fact that the mortgage was in trouble. He took over the bill paying in February but it was too late. He has lots of CC debt and he took a personal loan to pay off a CC debt. Let’s just say he was negligent all around in his bill paying. Can’t call it anything else. So, if he files bankruptcy, can’t he keep his house? and does he still have to pay his mortgage?

How many months behind is he on the mortgage? I wonder why he is paying his credit cards instead of the house payment? You want to pay your four walls first, housing, utilities, insurance, transportation, then all of the credit cards are last and if he can’t pay them, then they don’t get paid.

He can file chapter 13 and keep his assets. He’ll just have to work out a plan to pay off all or a portion of his debts. A chapter 13 does not require the liquidation of his assets, so you dont have to sell your house or expensive car. As long as his unsecured debts dont exceed $250,000.00 and his house and cars dont exceed $750,000.00. ONly your income is used to determine if he has the ability to pay. He needs to get on it ASAP if he’s 4 or 5 months behind on his house. Usually after about 6-8 months a house gets repo’d, maybe even later. He needs to contact a Bankruptcy lawyer fast if this is the case.

I would suggest that he pays his house and put the credit cards on hold though. Credit cards are unsecured debt, which means there is no hard assets tied to the debt like a house or car. Most Credit card companies will settle for less the amount of the balance of the credit card and will work with you. Although there are several Credit Card companies that won’t work with you… If you have any other questions, feel free…Good Luck with him….Hope this helps some..

Also, if your income is greater then your state’s median and you have monthly disposable income > 166.67 then you have to do Chapter 13. More details are in Bankruptcy Code 707 and www.legalconsumer.com.

I won the fight with the mortgage creeps

I know i mentioned once that we were in a battle with our mortgage company concerning our ARM and the misrepresentation of the loan.

As you may recall, we consciously decided to stop paying on the mortgage until they heard us. WE were emotionally ready to give the house up rather than pay 16 percent interest.

Its a long story and not all people that don’t pay their mortgage are dirt broke and do “bad” things like not paying their bills. According to McCain, we should not be rewarded for being dirt bags. The mortgage company in his eyes do no wrong. He got called out on that statement and quickly changed his tune. I really liked the guy until he said all that, now I am second guessing myself. They tried to take us for everything and told us lie after lie and we decided to just put an end to it. This was the only way to get their attention. They actually scheduled the house to be sold on the courthouse steps, when we didn’t respond the way the wanted, they changed their tune. To make a very long story short, we stood our ground and our payment has been lowered almost 1000.00 per month.

It was a very stressful thing, we haven’t paid our mortgage since november due to all this. we really were addamant about them modifying the loan. we sent letter after letter and they always said they didn’t get them. It was a huge mess. If anyone would liek to talk to me about details we went through to win this, just let me know. It was not fun, but it wa s worthwhile. We won! One big victory for our family. We were scheduled to be sold tomorrow at the courthouse. They let us know just a week ago that they would like to work it out.

btw, our mortgage predators are Option One Mortgage corp…subsidiary of H and R Block…. truly dirt bags…

wow, congratulations!


  • did you have to take them to court?
  • did you send your letters to them thru certified mail?
  • did you have to pay a lump sum for the back mortgage payments you didn’t pay?

Hi, No court, but did use an attorney with a pretty powerful letter about how upside down we are in the home ( including a long list of things needing repair and upgraded) and that if they wanted to sell at couthouse, they would loose a great deal more than if we stayed and they modified. We also mentioned we were getting ready to file a bankruptcy and might be able to avoid it if they were to modify. Homes in my area have depriciated 23 % (thats twenty three not 2 point 3) in the past 1.5 years.

yes, letters sent with return receipt and siggy required. they still denied getting them.

they have included the missed payments in the balance of the loan. WE have not agreed to their terms yet, but, truthfully, probably will 6% is what they are offering adjustable to 7.5 in 3 years. WE are still working on those two things. I would really like 1 of 2 things…..either….6 % fixed, or a reduction in our balance. But in all honesty, i will take what they have offered if they will not negotiate any further. ITs a pretty decent deal and if we keep our noses clean, we can upgrade and sell this one and buy a new house before that time comes.

sounds like they are making a decent deal, but they are still getting more than they deserve, but they know, we would not turn this down. But think about it…. go to court house steps? or modify,.. they did the smart thing because houses are not bringing NEAR the value at auction and this one is only valued at about 75,000.00. If we accept this deal, the mortgaged amount is 111,000.00.

Hope this helps! I am thrilled to not have to move. WE have 20 years worth of “stuff” and 3 kids , tons of pets, it would have been a miracle to find someone to rent to us.