Hard Financial Decision

Look into the Total Money Makeover by Dave Ramsey it has really helped us out and we are about to pay off our first cc. I should probably look into selling the house and moving in with a relative or renting till you can get back on your feet. Good Luck and God Bless

I'm sorry you are in that situation. Have you thought about modifing your loan? If you explain your situation to the bank you may qualify for a loan modification program. Also, short sale is less harmful to your credit than the other options (from what I've heard). Good luck!

www.makinghomeaffordable.gov is the current program that you can apply for (if you are still current with your mortgage). Try that first to see if you can lessen your mortgage payment to give you some breathing room. Contact your mortgage company and let them know your situation and that you'd like to start that process.

You may want to check www.daveramsey.com to get some ideas on dumping your debt and saving for your future. His Financial Peace program is phenomenal!!

If you need a referral to a bankruptcy attorney in Colorado - Lea Giarrusso is at ###-###-####. Her initial visit with you is free and this might be a great way for you to write down all your questions and meet with her. Unfortunately I had to go through that process because we had a business failure and she explained everything very thoroughly. It's a crappy thing to have to go through, but you're not a bad person and your credit can be restored (slowly...but it can be done).

Good luck...I've been there.

My husband works for a company called Hunter Financial Group. He has been in the industry for 15 years and knows all the ins and outs. He will let you know what programs are out there for you, help you with a short sale so you don't have to go through foreclosure or bankruptcy, explain how to fix your credit and ect. This does not cost you any money for his advice. There are no upfront free. He helped my mother after a foreclosure get into another home and she never thought she would be able to buy again. His name is Michael ###-###-#### ext 112. Let him know his wife referred you from Mamasource. They are also licensed in 18 states but he works at the coporate office in Arizona. Hope this helps you.

Can you go talk to the bank? Maybe you can refinance? Maybe they will work with you to lower your mortgage cost.

File for bankruptcy because there are ways to keep your home. And if it's a choice between doing a short sale or foreclosure, do the short sale, it's much easier on your credit.

My thought is, you always need someplace to live, so if there is any way to stay in the house, then do what it takes. If it means you don't pay any other bills except water and electric, then that's what you do.

If you need someone who can talk to you about doing a short sale, PM me. My partner has been in real estate for 15 years and does short sales. He's very, very nice and one of the most honest people I've met. GL to you. Facing what you are is exceptionally tough, I'm sorry.

j

Hi Kendall,I do not own a home yet so can not advice you on that. But My husband and I have done Dave Ramsey Financial Peace University class and highly recommend his series. Some things Dave says is live within budget. If you need to sell and move to something smaller do. He suggests second jobs, selling your things: yard sales, ebay,craig'slist, auction centers. Do all you can to pay down bills on your own.I like the idea of the foreclosure hotline. There are great non- profit groups helping people in this situation. We have been in tough medical situations you maybe able to contact the creditors and work out debt reduction plan. I know hospitals have programs and who knows what others have. It seems overwhelming but you can do this.You are not alone. Take care,
M.
www.daveramsey.com

A good attorney will give you a free consultation. It won't cost you anything to talk to one, and see what advice they have regarding your situation. They would be able to explain exactly what bankruptcy vs. foreclosure would do your credit, and what would be best in the long run.

Is the housing market good enough that you could sell it? Bankrupcy and foreclosure will have long term consequences.
I second the idea of Dave Ramsey's Financial Peace University.
Also, if you belong to a church, they may have some ways to help you. We have a community fund to help with morgage payments and such. We also have the Angel Food Program to let families purchase food at a very discounted price. You don't have to be a member to use some of the services available.
Good luck and God Bless.
Victoria

If you had to choose, I would not choose foreclosure. The president just passed a bill that says that mortgage companies are required to look at the value of the home and the mortgage and reassess it. I would call up your mortgage company and do everything you can to save your house. There are many programs out there that will do that. If you can't pay your medical bills, tell them. If you pay them $5.00 every month and they accept that then they cannot send you to collections. A lot of them will just keep sending you the bill, plus phone calls, and not do anything unless you do not send in the money. If you tell them you are financially struggling a lot of them will right off a portion of the bill. Also, if you have 70% of the bill here is a way to only pay that much. They always mark up the bills because of people who never pay so once you get the second notice that they are going to send you to a collection agency then call them up and tell them you have 70% that you could pay tomorrow or you will have to pay $5.00 a month until the bill is paid off. They will most likely tell you no. Don't give in, just hang up the phone. Usually by the count of 10 they will have called you back and said that that will work.

Have you checked out a credit counseling place? My husband lost his job and we paid our bills via credit card for a while, big mistake, anyway we went to Debt Reduction Services and was able to pay off all our debt in less than 3 years. Yes on your credit score it says that you are in a debt management program, but once you are paid off it all goes away and you get to keep everything. They even work with the medical bills. The only thing they cannot do is the mortgage.

Call your bills and talk with them. The more you talk, the more they are forgiving and willing to help out.

Talk to you bank. They might participate in the Hope for Homeowners act. You will have to submit a lot of paperwork, but you might be up for a refinance. If you are underwater the progam will assess the current value and adjust your mortgage with no consquences. We could afford our house until my medical bills got to be way too much. We are in the process of a short sale. We missed the Hope for Homeowners by 2%. And our bank wasn't willing to work with us, even showing the high cost of medical bills.

I would check with a bankruptcy lawyer first to see if you'd qualify. Depending on your income and expenses you may be able to file for bankruptcy and keep your house. You still have to make monthly payments to the state (who would handle settling your debts with your creditors), but at least you'd be able to keep your house, car, etc.

I have been in your shoes. Not the exact same situation but similar. It has now been 7 years since we filed bankruptcy. It was a hard decision to make, but in the end it was the best one for us. We got to keep our home, (because you are going to need somewhere to live anyway) and get rid of the debt you cannot afford to pay. In the end yes it hurt our credit for a while but we was able to sell our house and buy a new one just a few years later.
So yes it does hurt you but not for life. It was worth it just for the releif of the stress. You just have to make sure that you learn from your mistakes so that you don't put your self into the same situation again. You might even be able to do what some ove the other gals have mention with trying to lower your mortgage.

Good Luck! Your not the only one to go through this. Keep your head up!

Call your morgage company and ask about mortage assistance program. This program helped us a lot we were paying $1900 a month plus mortgage insurance and our taxes. Our payment now is $1286 and it includes the taxes and insurance. It take time and they will as for the same documents a million times but saving almost $800 a month is worth it. It also dosent hurt your credit like forclosure or bankrupcy. Look into you might get the help that you need with out feeling like you have lost everything.

Your best option for your credit and your future is a Short Sale. Foreclosure and bankruptcy hold on your credit file for up to 20 years and a Short Sale shows more of an initiative to handle a bad situation well and reflects better on your credit report.

You will hear of most bankruptcy people saying that it was the best thing they did and now they have the credit power to buy again and move on. One thing they do not tell you is the types of interest rates that you get and the extreme amount of money they spend on fees and high interest. Same with Foreclosures. The chances of ever getting the BK off your record is pretty dim as opposed to a Short Sale that you can clean up quite easily.

Good luck! I have been in your shoes and it is not easy.

P.S. Once you get through all this contact Todd at ###-###-####, he is a credit advisor and will remove hits on your credit so you can have a clean start. Tell him I sent you, he did wonders for us.

We were in the same boat a couple of years ago. Our mortage was $1500/mo. I only worked two days a week and lukily we work for my husbands parents so he could work as many hours as he needed to make our bills. The down side was that it was 70 or more hrs per week so he was not home much. We finally thought about letting the house go. That wasn't really worth it so we decided to put the house up for sale and move out of it. We moved into a cheaper place (renting) and started renting the house which helped up make the payment. The renters that lived in it decided to buy it 1 year later. Life has been so much easier. My husband is not stressed due to finances anymore and we are able to save 10% or more each week and we are paying down flight training debt. Hope this helps.

Updated

My husband and I were in the same boat a couple years ago. We had a $1500/mo. Mortgage. I work two days a week and he was working 70 + hrs a week just to make the bills and sometime not even that. we were going backwards pretty quick. We thought about letting the house go to foreclosure but decided against it. We have 2 daughters and we decided to put the house up for sale. We did that but with a down market didn't get much intrest, so we kept it on the market and rented the house and moved into a smaller cheaper place (renting). We are now able to save atleast 10% and are able to pay down some flight training debt. We were also able to buy a new used car. It is amazing how much you can do with the $ used on a house payment that size. I hope this helps. Good luck to you guys.

I work in the foreclosure industry and I would say that you should file for bankruptcy. You will most likely get to keep your house or at least stay a lot longer. Also the bankruptcy should wipe out your medical bills and credit cards freeing up money to pay your mortgage. My sis-in-law filed for bankruptcy and they still own their home. Both will be about 7 years on your credit, but in the long run bankruptcy will be better for your situation. Have you tried working with the bank? Sometimes it takes awhile but they may work with you to lower payments, or you can look into short selling the house as well. Good luck. R.

We found ourselves in a similar position. We opted for a short sale on our house. Basically, we listed it at a lower price than we owed so that it would sell. You have to go through some extra steps with the bank (showing financial hardship, etc) and it still dings your credit, but not as bad as a foreclosure or bankruptcy. Also, we received a 1099 at the end of the year for the remainder ("cancellation of debt") but since it the house you resided in all year and if the mortgage is only the price of the home + updates to the home (no consolidation) you shouldn't have to pay taxes (if there was additional -like debt consolidation - in the mortgage, there is another clause that lets it be not taxed but a bit trickier).

It's kind of a pain, extra step to go through than a regular home sale, and of course having your house listed can be a challenge anyway. Make sure you find a real-estate agent who is very familiar with short sales (you MUST go through an agent for a short sale). The good news is that once you have started the process for a short sale the mortgage company has to stop bugging you for payments. And a short sale is usually easier for them to deal with than foreclosure, so they are willing to be very reasonable on it.

Just got this newsletter from Dave Ramsey: Hopefully it has some info you can use. One article is titled: Don't Foreclose on Your Future http://www.daveramsey.com/newsletters/personal_finance_ne...

If you haven't heard of Dave Ramsey, read up on him on his website. Read his Total Money Makeover Book and start following his 7 baby step plan & get a budget in place. He doesn't recommend bankruptcy or forclosure.

Can you afford your house without your other debt? If so, you can file bankruptcy to get rid of your unsecured debt (credit cards, cars etc) and you can still keep your house. Another option may be a loan modification - where you write your bank a letter sending them your financial info and your circumstances. Some banks will modify the terms of your loan (like the interest rate) to lower your payment. Check with your bank. Probably best to consult with an attorney as well.

Hi K. - this may seem hard to believe but you're not in a terrible position. Your credit rating is so amazingly important in this economy. You wont recover quickly from a foreclosure or a bankruptcy. A bankruptcy follows you for 10 yrs!

I would recommend calling a credit counseling service - a reputable one who can renegotiate your debts for you , even the medical bills, and set you up on a payment plan. And it wont ruin your credit. Do whatever you can to either keep your house or sell it at an aggressive price. Also talk to your bank about restructuring your mortgage.

Go to your current mortgage co & ask for a modification package. The thing to remember when filling out the paperwork is that you DONT want to look like you cannot afford your home (unless you truly cant) so be very honest. Mortgage co would rather work with you til you get on your feet than to lose a client, they possibly will lower your rate, extend your term etc. But they wont work with people that will probably default even if they work with them. Also call all your credit card co & medical co & tell them you can only pay them "x" amount per month. Remember just because you walk away from your house the bank can still sue you.

Please, Please, Please look into the Dave Ramsey class....just go to daveramsey.com & go to class lookup & put in your zip code....this will guide you through your hard times & give you hope & peace of mind....best wishes

I vote for neither. Have you called the foreclosure hot line? 877-601-4673 I work for a non-profit that has an approved housing counselor that gets calls from them and she has been able to help homeowners get a modification through the government or the bank so they could stay in their homes. Because you need your home. And $1700 is a lot to pay. Try the hot line. No one should be afraid to lose their home. (And don't let any one charge you for their services!)

Call Dave Ramsey! :) Seriously.
If you have family or close firends who stay hoem with kiddos, use them. Work more hours, or have your husband get a second job. It's not the best solution for the family unit and spending time together, but if it gets you through this rough patch, then it will be worth it. Either you work more, of he works more. And if his new job is not paying what his old one did, then keep looking. Always have a resume updated and ready to go. Always be on and market yourself. You'd be amazed at all the places you can network successfully.
And cut back to the bare bones minimum (I'm sure you already have). But some folks think things are neccesities and they really are not in bad times. Sit down and take a hard line look at your budget. Write it down, stick to it.
This too, will pass. Just get through it and dont' stress too much or fight over it. Love one another and keep the family unit strong. Good luck and I woudl give Dave a call. :)

I have been there. I'm not a financial expert, obviously, but I think a foreclosure is the lesser of 2 evils. However, both will be on your credit report so finding another place to live may require a bigger deposit.

If I were in your shoes and my mortgage was not underwater, I would put my house on the market to see if I could sell it. Then I would move into a condo, rent a house, or an apartment that has a lower monthly payment.

If my mortgage was underwater, I would prepare to walk away, let it forclose, and put the money saved by not paying the mortgage towards the security deposit of a new place. Foreclosures take months to process. I know one family that has been fighting it for over 1 year.
Some other things to try:
- Double check your W-2 forms. If you got a federal refund this year, its possible that you could increase your withholdings by 1 or 2 and get a few extra bucks in each paycheck.
- For your debt, don't send large extra payments. Pay just $5 over the minimum due. I know it sounds weird, but until you get your housing situated, the debt can take a back seat.