Posted: 8/11/2009 7:00:57 PM EDT
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I have some friends that are victims of their own stupidity. They got a 2nd mortgage getting behind & now they are thinking about getting an apartment before their credit gets bad & they can't get one & just walking from the house.
I guess they were planning refinancing to a better single loan or whatever not realizing that the market couldn't go up indefinitely. Of course, unless they stay in their house, they will ultimately have do declare bankruptcy or else they would have to pay the mortgages anyway. I was wondering, before they do all that, if there are any other options. Like, are there any recent laws or programs that can help readjust loans or something? I remember hearing about something like that, but I can't remember what is it called exactly. Any ideas would be appreciated. Thanks |
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Well, I stopped in a bankruptcy lawyer today & they said that you can file "chapter 7" or "chapter 13" bankruptcy.
Apparently, if you walk from you house, they might could sue you for the balance on the note after they sell it at a discount & fees & stuff, but she said that unless you have lots of assets or something, they normally won't even bother b/c the defaultees would just then file chapter 7 anyway. Or you can stay in the house, file chapter 7, get unsecured debt cancelled & get a terms on your mortgage renegotiated if everyone thinks that there is a chance that you will be able to handle the new lower payment. Is one's retirement 401k or IRA or whatever safe from bankruptcy? I guess bankruptcy can be on your credit for like 10 year eh? Their main fear is that if they walk from the house and their credit is already ruined they wont be able to get an apartment. any input? |
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