My mortgage is about to go into foreclosure–as we are two months behind right now and we also owe for June…The mortgage company will not accept a partial payment…and will initiate foreclosure proceedings very soon..we are also in trouble with our car notes and timeshare payments… should we consider bankruptcy if we cannot work out something with our lender???
–Mark
Jonathan Ginsberg responds: Mark, if your mortgage company will not work with you, then your only real option is Chapter 13. I think you are smart to consider this option early – which is preferable to waiting until a few days before foreclosure to look into the process. At a minimum, you should do the following now:
1) request copies of all 3 credit reports (both you and your wife) – credit reports are free in Georgia but will take a few days to arrive in the mail (by contrast if you need them immediately, I can get them for $45 per person). This is another advantage of starting early
2) get your credit counseling certificate. Credit counseling is now mandatory and if you wait until the last minute, you may not be able to get an appointment. I have a section about credit counseling on my Bankruptcy Worksheet site – click to visit the page where I have posted links to multiple credit counseling companies.
3) complete my bankruptcy intake form. Please pay special attention to the budget portion. Chapter 13 will not help you if you do not have enough stable income to pay your mortgage on-going and contribute to your Ch. 13 plan. If you have fallen behind on your house and your car because you are not making enough money, you may need to consider surrendering one of these secured items to make a Chapter 13 plan feasible. I can tell you that in almost every case, the Chapter 13 trustee will insist that you give up your time share. If you fell behind because of an unusual circumstance (i.e., an unexpected job layoff, an illness, a pregnancy, etc.) then a 13 will catch you up.
As part of the questionnaire I would need copies of all pay stubs for income earned by you and your wife (regardless of whether she would be filing with you) for the period December, 2005-May, 2006.
I also think that during this process you should continue negotiating with your creditors. And if you have numbers and knowledge about how Chapter 13 would work for you, you will be in a better position to evaluate your options.
I am happy to spend 30 minutes with you at no charge to review your completed questionnaire. Let me know by phone or email if you would like to talk.