I’m About To Stop Making Payments

I have 3 properties. The one that worries me the most I bought in Oct. 2005 and it’s upside down for about $50,000 (according to zillow.com). I’m about to stop making payments for it. I have a lot of debts and I’m a single mother of 2. There is no much job listings, etc…

What would be your best advice for me knowing that I have 2 other properties which they both have equity (around $60000). I have about $90,000 in debts between credit cards and 2 credit lines. I would really appreciate your advice and help. I am very frustrated because I never thought I would not be able to pay back the money I borrowed from the credit card banks. I’m very desperate. I don’t know which direction legally speaking would be the smartest to take.

I have a 9 months old daughter and a 4 years old son. I live alone with both of them and neither of them goes to school yet. My son will start school next year. In other words, I have no choice but to stay at home taking care of them, which is what I really love, but on the other side I feel so sad because I took care for my credit history for about 11 years so well.

I have never been late ever ever in 11 years; and I’m seeing the day closer and closer when I will have to just STOP making the payments.

THANK YOU VERY MUCH. GOD BLESS YOU

Liz

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Hi Liz,

One solution might be to sell the property that is upside down by $50,000 as a short sale and receive a full release of liability from the lender.  Another option might be to sell all three properties and apply the proceeds to the deficiency. 

I gather you’re not working and have tallied up an extra $90,000 in debts.  Do you have an income?  Sounds to me like you should talk to a bankruptcy attorney for advice on where you stand.

One important note is that – all things equal – it’s far better to be able to complete a short sale to avoid foreclosure than it is to file bankruptcy.  Continuing with this logic of keeping everything else constant, if bankruptcy is a must, then it’s better to have a bankruptcy and short sale than having a bankruptcy and foreclosure.

The very fact that bankruptcy is a possibility should be evident to the shorting lender and assist the borrower/seller in the game of short sale hardball.

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.