My primary home has a 2nd mortgage that has a balloon payment due in 2 months of 26,000 . I do not have that amount money available. I recently had a divorce and my income and credit score is low I make 45,000 a year. I incurred a lot of debt during my divorce so I owe on 2 credit cards (total of 21,000) making my credit score 650 to 680 . I am current on my 1st mortgage. The home has equity as stated above I have been current for more than 9 months on my fist mortgage. I have never filled for Bankrupcy
Of course. There are many options to settle including settling for a percentage of the debt or extending the maturity date or refinancing into one larger mortgage with better terms. However knowing more about your property worth and the balance of the first will help me determine best option for you. Consult with an attorney to discuss all possible scenarios
The good news is the answer to your question in probably YES. Yes, there are alternatives to bankruptcy in your situation. You may be able to qualify for a loan modification wherein your 2nd mortgage holder will agree to modify the terms of the mortgage to create an affordable payment. In your case, that would mean changing the term so that the balloon payment converts to a 15 or 30 year mortgage, which will mean monthly payments. In addition, a loan modification can change the interest rate (lower) and the principal balance (if there is negative equity.) A free consultation will an experienced loss mitigation attorney will give you a better idea if you can qualify for these programs.
I agree with Ms. Salcines. There are options, but you will need to sit down and talk with an attorney to review them. Unfortunately, if the holder of the second mortgage won't cooperate, bankruptcy may be the only option. That would help settled the terrible credit card burden you are dealing with.
You should probably sit down with an attorney who has knowledge of bankruptcy.
Best of luck!
This answer is provided for informational purposes only, does not constitute legal advice, and does not create an attorney-client relationship. Actual legal advice can only be provided after completing a comprehensive consultation in which all of the relevant facts are discussed and reviewed.
You fail to set forth all the facts. you say you have equity but fail anywhere to state "(1) what is the house worth; (2) what is owed on mortgage #1; (3) what is owed on mortgage #2.
Thus, the facts missing govern the advice. For example if the fmv of the house is LESS than 1st mortgage maybe a ch 13 can be filed WIPE OFF in full the 2nd mortgage! A mortgage score has nothing to do with this. Anyone can increase that score later. The real issue is what do you do about your debts! But other issues and facts can govern filing a bankruptcy..and the expenses on the means test can change over time and in fact change on MAY 1ST !! So I point out several of those issues next.
You need and want to enjoy your fresh start also. But the most important thing is to meet with an attorney as you asking this question means you have not. You care about 2 goals: keeping everything you have equity in and discharging all your debts. If you don't have any of the exceptions to discharge you will obtain that goal; most exceptions are set forth in 11 USC. 523 (Google it) like child support, some income taxes, traffic (in a ch 7) and criminal fines , and presumption of student loans. But some debts are dischargeable in a ch 13 but NOT in a ch 7 so you want to make sure and your attorney will discuss any such types with you also!
Your exemptions depend on what state you have lived in in the last 2 years and thus if in your state, then your states exemptions will apply. Most persons filing keep everything they own but your attorney will confirm that with you when they learn everything you own and the equity thereof!
Some secured debts like homes, vehicles, other secured debts an attorney will discuss your options on also as you must list any debts; but that does not mean you will lose them unless you have too much equity or are in default on paying for them! Discuss those options if they apply with your attorney too.
But other issues can arise that can greatly harm your case. Just one example: If you paid back a relative $3,000 11 months ago and now file bankruptcy next week, the trustee can SUE that relative to retrieve that $3,000 (under what is called a preference) for the benefit of the bankruptcy estate. As a result, most attorneys don't charge to meet with them the first meeting so meet with one no matter what.
Many great attorneys can be found right here on AVVO in your state so look, call, and meet one as soon as you can.
You should also want to know when to file: is there an advantage of waiting versus filing now and who should you pay between now and then! Good luck and enjoy your later fresh start.
Yes. There may be options such as Refinancing, Modification or Extension.
Refinancing, depending on the balloon amount, may be available even with your credit score. Speak to a local broker who can help
If not, your current lender may be able to modify your balloon mortgage to a 15- or 30-year mortgage, or in the alternative offer you an extended payment plan for the balloon. Give them a call and ask about your options.
Please mark helpful or best answer. Communication of information by, in, to or through this Web site and your receipt or use of it (1) is not provided in the course of and does not create or constitute an attorney-client relationship with Christina A. Fiallo, Fiallo Law or its affiliates, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from a qualified attorney. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. The hiring of an attorney is an important decision that should not be based solely upon Web site communications or advertisements. A debt relief firm. We help individuals find federal or bankruptcy protection under US Code 11.
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