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  1. #1
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    Jul 2014
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    Default Can You Revise a Chapter 13 Bankruptcy to Include a Mortgage You Reaffirmed

    My question involves bankruptcy in the state of: MA

    Hi, my friend and her husband recently, bout 3 months ago, both filed chapter 13 bankruptcy (jointly I believe, but not for sure) for the sole purpose of staving off the pending foreclosure on their house (located in MA), which is in both their names, (the foreclosure was cancelled and their loan re-modified, with past due pymts included in bankruptcy) she desperately wants out of the marriage, and home, but is afraid of getting stuck with 1/2 of the mortgage debt when she leaves, as she knows he will also walk away from the house 'cause he can't afford it by himself.


    Question is, say she does leave, and he also walks on the house and it goes back into foreclosure (they are well over $100,000 upside down on the house, and he WILL NOT agree to selling the house at this point, period, with a short sale or what not), can she have her bankruptcy filing adjusted to include her portion of the remaining mortgage debt after foreclosure, in order to get it discharged, and if so, within what time frame from the original filing? Or re-file chapter 13?...whichever so that she can make sure she can wipe out that debt.


    She could very well be my future wife, assuming we can get this figured...

    Your help would be greatly appreciated!

    Thank You!

    James

  2. #2
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    Sep 2010
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    19,901

    Default Re: Can You Revise a Chapter 13 Bankruptcy to Include a Mortgage You Reaffirmed

    She's in financial trouble. The loan should have already been under the chapter 13 or else it wouldn't be necessary to reaffirm it. You don't pick and choose what debts go in a bankruptcy, ALL MUST. Bankruptcy for the "sole purpose of staving off foreclosure" isn't valid either. Someone is feeding you a load of bull as to what is going on here.

    There are time limits form between two and six years about when you can file for another bankruptcy.

    Her credit is already trashed and will continue to be trashed by her misbehavior. If you marry her, this WILL rub off on you.

  3. #3
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    Jul 2014
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    4

    Default Re: Can You Revise a Chapter 13 Bankruptcy to Include a Mortgage You Reaffirmed

    Hi, thank for you the quick reply..
    the mortgage WAS included in the bankruptcy, and assume all their other debts were too..
    She is giving me accurate info, just don't know the complete details, just wanted to know if within say 6 months or a year of the bankruptcy filing, since it will likely go back into foreclosure, and assuming it does, whatever her half of the remaining debt is, can that be worked into her original bankruptcy?

  4. #4
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    Sep 2010
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    Default Re: Can You Revise a Chapter 13 Bankruptcy to Include a Mortgage You Reaffirmed

    If the only reason your friend and her husband filed a Chapter 13 was to try to save the house and BOTH of them no longer either want or can afford the home AND they "qualify", the Chapter 13 can be converted to a Chapter 7 and the home "surrendered".

    If the husband is not willing to convert because he wants to try to save the home, your friend can deconsolidate her portion of the case and convert to the 7, assuming she qualifies and there were no other reasons to be in the 13. Doing this will leave the husband in the 13 to fend for himself.

    Either way, she should be discussing this with her bk attny. If the two of them cannot agree on how to proceed she will most likely need to find her own attny to step into the representation.

    Des.

  5. #5
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    Jul 2014
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    Default Re: Can You Revise a Chapter 13 Bankruptcy to Include a Mortgage You Reaffirmed

    Hi Des, thanks so much for taking the time to reply to my question on this holiday!

    No, he's been unwilling to take any steps that would allow them to walk away from the house, selling it in a short sale, or whatnot...she hates the house, and wants out desperately...

    I've been researching all facets of bankruptcy/foreclosure that relates here, and did also find out that her chapter 13 could be converted to chapter 7, and she does qualify with under the Means Test..

    1st Question: Does it matter whether they filed jointly or separately? Once she leaves, he will most definitely let the house go, and thus it would go back into foreclosure...

    2nd Question: Once the house is sold in foreclosure, the remaining 1/2 of her mortgage commitment, which of course has negotiated terms in their bankruptcy, does that remaining still constitute as being part of the chapter 13 and be eligible for being rolled over into a chapter 7, or will it count as a new and separate debt obligation that would need to be first add/modified into the chapter 13 before filing chapter 7, or how does that work?

    Again, thanks so much for sharing your expertise here...she's the love of my life, and I've been fishing for a solution to her house situation for over 4 yrs now, and really hope this is the solution we've been wanting.

    Thanks!

    James

  6. #6
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    Sep 2010
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    478

    Default Re: Can You Revise a Chapter 13 Bankruptcy to Include a Mortgage You Reaffirmed

    1st Question: Does it matter whether they filed jointly or separately? Once she leaves, he will most definitely let the house go, and thus it would go back into foreclosure...
    Joint filings are allowed as a convenience to married couples. It is actually 2 bankruptcies filed as one. Your friend can convert her portion which would require both a conversion fee ($25.00) and a de-consolidation fee ($310.00). However, it is stupid for them not to do this together. If, as you say, he will dump the home once she moves on, he too will convert at some point. If both can be on the same page convert the joint case (no deconsolidation fee) and be done with it.

    2nd Question: Once the house is (foreclosed) does (the deficiency claim) still constitute as being part of the chapter 13 and be eligible for being rolled over into a chapter 7. . .
    The underlying obligation is part of the bk as we speak. That does not change if one or both debtors converts to a chapter 7. The deficiency claim will be subject to the discharge obtained by your friend, her husband or both as the case may be.

    What is not part of the 7 is any HOA dues/fees/assessments that fall due from the date of conversion to when the property is lost to a foreclosure - assuming there is a HOA.

    Des.

  7. #7
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    Jul 2014
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    Default Re: Can You Revise a Chapter 13 Bankruptcy to Include a Mortgage You Reaffirmed

    Thanks so much! Appreciate your expertise..

    Is there anything else with all this that I might be missing, legal wise?

  8. #8
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    Sep 2010
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    Default Re: Can You Revise a Chapter 13 Bankruptcy to Include a Mortgage You Reaffirmed

    Quote Quoting jbennett71
    View Post
    Is there anything else with all this that I might be missing, legal wise?
    There probably is but since we do not know all the specifics of the case, your guess is as good as mine. Your friend needs to discuss the specifics with a local bk attny.

    Des.

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