I am in an option ARM loan that will double my payment in four months, what will filing for bankruptcy do?

Question

I will be behind on my payments and eventually be in foreclosure. what can I do? I can't even afford to refinance because my payments will be very high due to negative amortization loan and low credit score. Selling is not much of an option either because it is not a sellers market right now and I'm pregnant I dont want to lose my home! Any suggestions will be greatly appreciated.

Answer 1

Call the Bank of Mom and Dad. Other than that you seem pretty screwed. That is why the subprime lenders have ruined the real estate market for the country because people like you were able to buy houses in the first place. Get some roommates and start charging rent. Other than that it seems you will probably lose your home sooner or later. Sorry.

Answer 2

Are you sure your payment will double? That seems very odd. Who gave that info, the lender? Get all your info together and take it to a United Way or CCCS office. I have heard there are some attempts to find ways to avoid someone in your situation for getting foreclosed on. Maybe they can review your budget or contact the lender. If you are that tight, you will need professional budget help.

The real estate market is bad, OK, how many Realtors have you met with 2 or 3? If it is zero, then you are simply guessing about the price and selling time for your house. Get expert advice.
For you bankruptcy is not really the issue, it is foreclosure. With just a foreclosure you might not even need to file BK, as the lender may not have any recourse against you beyond the loan amount. If you default on the loan it will take 3-6 months for the foreclosure process to go through. Filing bankruptcy in the middle of the process might buy you some extra time, but filing BK costs money. And it might not make any difference. If you could show in BK court you could make the payments and catch up the court might force the lender to accept a plan give you the debtor one more chance.
Some options - get a roommate.
Offer the lender the house lieu of foreclosure. This where you offer the house back to the lender, they list your loan in default, but zero out the blance. You would need to talk to an attorney for that one. It would have to be in writing, and you would need to be assured they would not seek to collect any difficiency balance. Good luck.

Answer 3

WOW that is opened ended - yes i agree do something now before its too late --I'm a mortgage broker in Fla....Where are you located? If you explain alittle more what your in via email i'm sure I can help, but foreclosure you dont want....BKRPY isn't very good either, but depending on your situation -just dont claim Ch. 13 -payment plans -dont prolong the pain -just claim ch 7 if you must - these clears debts, but dont expect too many good rates on anything for about 4 years...

Answer 4

First contact your bank, they may be able to set up a hardship case for you and work the numbers out. It doesn't hurt to talk to a bankruptcy attorney, most will give you the first consultation for free, explain to them you situation and desires. I'm sure that after talking to you bank first then the attorney second you will find your answers...good luck!

Answer 5

That is def. not a good idea unless you feel you have no choice. Give me a call and we can talk about this 619 822 2418. I am a Loan Consultant.

Answer 6

There are many ways to sell your home and fast if you need to. You won't make money off it and may be in a little debt but at least you would be able to stay out of bankrupcy and stay afloat.

Answer 7

Go talk to your bank RIGHT NOW! It is better for them that you don't default, so they will try to work with you on refinancing options. No one wins in foreclosure.

Good luck!