My attorney isn’t helping me very much. I’m having to do most of the legwork. He’s taking his time getting answers and I don’t have much time. The house was put in with the bankruptcy, but I thought the payment to the trustee included the house payment (big mistake on my part to assume this)…and since no house payment was made in addition to the arrearage that was part of the house payment, they are foreclosing…Most of the lenders I have talked to said they need a bigger ratio between the appraisal amount and the amount owed so they can’t help me…Thanks for the response…
Last year I went into Chap. 13 bankruptcy and thought trustee amount included house payment. Come to find out, it doesn’t. House is now in foreclosure and I only have some of the money to reinstate it. I am about $8,000 short, and need some creative ways to come up with the rest of it before it goes to sale. I want to keep the house from foreclosing and need some help. I am in the Kansas City, Missouri area…the house is a single family ranch with 3br, 2 car gar. and about 1100 sq. ft. It has fenced in back yard…has hardwood floors throughout and newly painted interior. The appraisal amount per the city is about $68,000 and the amount I owe is $56,000. I believe the house will appraise for more because of 4-lane street at one end of house going in and subdivision with $80,000 houses at the other end. Can someone help? Willing to discuss any alternatives…
First, get yourself a new lawyer. He’s making money from your problem, he should be more than willing to talk with you. Or, mention that you will have to talk with (complain to) the licensing agency in your state.
Second, talk to your new lawyer (or the attitude adjusted old one) and see if it’s possible to lease option your home. Of course, you would have to move out; but a large payment from a tenant/buyer would help with the $8,000 that’s owed. In addition, you would get money when the property is sold.
Unless your attorney is incompetent, there is probably a logical reason why the arrearage on the house was not included in the plan. Such as, your income was not sufficient to both cure the default and pay other debts under the plan, and it was decided that the only option you had was to let the house go back to the mortgage company through foreclosure. Let’s face it, how many months have you been able to live in the house free up until now? Multiply that by your monthly payment, and you’ve probably received a fairly large sum, and giving up the house now, really causes no loss to you. That’s one way to look at it.
On the other hand, if you have sufficient income to continue to pay the current payments, PLUS an amount that will cure the arrearage over the remaining months of the plan, it is possible to amend the plan and bring the house in under it. If your lawyer won’t take the time to explain your options to you, change lawyers.
Have you talked with your mortgage company and explained the situation with them? Some mortgage companies will allow you to make reduced mortgage payments and they will attach the deficit to the end of the mortgage. I don’t know how far behind you are so it may be too late for this option. Another option if foreclosure is unavoidable is to offer the property to the mortgage company in lieu of foreclosure. You will still lose the property, but you will not have a foreclosure. Talk with your mortgage company and see it there is anything they can suggest in short of this route. Depending on how far into the process you are you can try to sell the property so that you will at least get something out of it. If you need a quick sale you will have to be flexible with the terms.
Have you spoken with your attorney? I can’t believe that they would let you miss putting your house in there!
I’m not a lawyer, but I think that they usually let you reaffirm your house payment and keep your house.
If you don’t have an attorney, you should talk to one and see if there’s any way to get your house payment plus an additional payment added to your 13 after the fact to help you make up for the past due amount.
Contacting your lender is not a bad idea, either. They might want to work with you rather than continue with foreclosure proceedings.
Re: Help!!! House in foreclosure. - Posted by Brad Crouch
Posted by Brad Crouch on April 18, 1999 at 18:14:49:
Be aware of the tax ramifications involved with allowing the foreclosure to proceed. Like with a “short sale”, the lender will send you a 1099C form for any deficiencies. The IRS cannot be “bankrupted out” and you will have to pay ordinary income tax on whatever “debt relief” amount the 1099C lists.
If the IRS will agree to allow payments on your “debt”, understand that interest will also be added.