MICHIGAN BANKRUPTCY MORTGAGE OPTIONS Part One
You owe more on your mortgage than your house is worth, you want to leave, what are your options?
You Cannot Afford The Payments
If you cannot afford the payments, you will not be able to keep your house, unless you get a modification from the mortgage company.
You have probably tried that already; so you know you are at their mercy. They lose you papers, it takes forever to get through, when you do, someone different has your file.
A. More Than One Mortgage On Your Home, And You Want To Keep It
Under current law, there is no way to force the mortgage company to change the terms on the first mortgage on your principal residence. If it is a vacation home, you can. If it is a home you are renting to someone else, you can. If you live there, you can’t.
But, If you have a second, or a second and a third, and the home is worth less than you owe on the first, in a Chapter 13 bankruptcy, you can strip off, or get rid of, those second and third liens.
But, you have to be able to make the payment on the first mortgage.
Many of my clients can afford a Chapter 13 payment, because it works out to less than the second mortgage payment.
You could be behind on a second mortgage of $300 per month, but you may be able to file a Chapter 13 plan and afford a $200 per month payment.
At the end of your three, or five, year plan, you are discharged of your personal liability on all unsecured debt, including those second and third mortgages, and, the lien on those mortgages is gone, discharged.
B. I Give Up! Take My Home, Please!
You are fed up with the mortgage companies, to hell with them, how do I get out of this mess?
If you cannot make the payments out of your income, STOP!.
Please don’t take 401k or IRA money that creditors cannot get and use it for house payments, while you wait for things to turn around.
TO BE CONTINUED
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