Loan Modification in a Chapter 13?! Help me!

[Mike]

After a ruff patch last year which included, an injury were my husband was unable to work, and my father in law loosing his job and moving in with us we found ourselves in a heap of debt. We filed Chapter 13 in early January with the news of a new baby on the way and the hopes of better days on the horizon but it didn't quite turn out that way. Within our Chapter 13 are all the bills inculding our cars but our house is OUTSIDE the plan. In January when we filed we were told by our lawyer there would be no house payments to be made to Home EQ until our plan was settled which would take a few months because at that time we would be within a "stay". March came and all the terms of the bankruptcy were settled. On April 1st we sent in our payment as we had been told to Home EQ. Home EQ called and informed us they were unable to take this money because we were in bankruptcy we explained the situation to the person on the phone. She told us someone would contact us from the bankruptcy dept. Well...time went by with nothing. Monthly we would call and be told that we were still under a "stay" and they couldnot accept our payment. On June 2 we recived a letter from Home EQ stating they were going to file a motion to remove the "stay". At which time my husband and I thought we would be able to make payments on our home...not the case. On June 3 we got a call from our lawyer that stated she had been in contact with Home EQ and their lawyer and they wanted to remove the "stay" we told her we were aware of this and she said that in doing so they wanted us to A) put our home inside our bankruptcy and catch up on the payments (which would make our Ch 13 payments unaffordable) B) pay Home EQ $5,000 by June 10 (which was back payments from January to June-if you remember we were told we would not make payments till march-and Home EQ lawyer fees) or C) give up our home. We were floored to say the least. Never did we think something like this was about to take place. Our lawyer told us that we should put our home within the ch 13 plan but for us is just unrealistic. We have a 3 year old and a new baby to arrive in 8 weeks now and we can not afford what the ch 13 payment will adjusted to. Our lawyer was able to get us a little more time (our hearing to romove the stay is now July 22) but we have to come up with an option by then. Our lawyer basically told us those were our 3 options and to choose between them. After talking things over with her we decided that if we couldn't find a better option we would be forced to give back the home and informed her of such. She told us that she would wait a bit and _call us before she told Home EQ's lawyer we were giving up the home_. My husband and I have been going through different options out there even tried calling Home EQ (we were told our lawyer had to talk to their lawyer, they could not speak with us) and even found some web sites trying find a way to fix our situation. We found a few different sites that offer to do loan modifications but all have wanted between $500 and $3,000 up front. We have talked to a company today that all but guranteed he could modify our loan. But after reading a few post on your site I called our lawyer to see if she would try and work with Home EQ for us. Her response to me was that she just signed an order agreeing to surrender the house back to the creditor. She had told us she was going to contact us before hand but _did not do so_!!! She then said she sent the attorney an e-mail trying to withdraw my approval, so we'll just have to see what happens. She went on to say that modification is a voluntary agreement that the judge can not force so if the case goes to court you'll either have to surrender the house or modify your plan to pay it in full. She also said that we could just try and discharge our plan and try to refile a chapter 7 and try to do a loan modification while we were not in bankruptcy. But was she never willing to help us try to do a modification. Now, we are playing the waiting game to see if Home EQ will even allow us to withdrawl the approval she sent in. I am hot, swollen, pregnant, at my wits end, and wonder if this is even worth it anymore!!!