Your own personal SHTF

[DamnearaFarm]

Please don't blast me, I really, really can't take it now. I need some opinions from heads that aren't spinning right now.

The situation: my company was absorbed by another company in late November, so my future may not be as secure as it once was.

This winter has been harder on me (and we're not even into winter yet, that's sad) health-wise than any season ever before. It's been raining almost continually, so any semi-dry days are non-existent. My rescue inhaler isn't rescuing anymore, and there's no stronger inhaler to put me on. I've woken up with numb lips three mornings this week and my hands were numb for a few hours Wednesday after getting out in the fog and driving to work. I spent all morning Thursday at the Dr, trying to figure out where to go from here. What can you do when your doctor tells you "I can't fix you. I wish I could push a button to make it go away, or to send you to NM." ? He gave me 2 ccs of dex in a effort to slow the inflammation. It's effects began fading Friday morning.

Then, two weeks ago, Mr. RRR's company announces that the owner will be retiring and the company sold. The first guy it was offered to, a friend, couldn't get approved to sell the same service, as the company was grandfathered in. If the company had gone to him, the money issue would have been moot. As it didn't, the company went on the block and was bought by two different corporations. The one who bought the office Mr. RRR is out of has already made an offer- it's half or less of what he's getting now (until the end of the month). The second company's offer is expected to be a bit more, maybe 55-60% of his current salary. Neither one is enough for us to live on, even giving up ALL the horses and all the extras (satellite TV and xmradio- the net and phones are free). Heck, the first offer would only cover the mortgage, truck payments and utilities- leaving no money for food or fuel. We can't do anything with the trucks, either- we're two years away from paying each off, having had them for four years each- no refinancing possible.

Now, we also see this as a great opportunity for us to get the heck outta dodge and on to NM. We can live cheaper there, lower food costs, lower utilities (ability to use woodstove for heat too), lower cost of living all around- and I won't worry that I will expire soon (I don't mean to sound flip. I've been scared to death for the past month, afraid that one time I pull out that inhaler it won't even begin to help.) If normal breathing before my illness was 100%, NM was 90-95%. Here is about 35-40%.

We're applying like mad with companies out there, to see if we can get a job lined up. If we do (and here's where the flaming part may begin) we're going. We cannot afford this house (never get a mortgage from a friend who is a mortgage broker- no matter HOW long you've known them) as the payment goes up another six hundred bucks in Feb.

So, and I know our credit will be damaged either way, would you:

File bankruptcy and let it all go back, thereby freeing up a lot of cash and starting a long, long fight back to solvency (not my first choice)

or

Allow the house to be foreclosed on, while maintaining payments on the other bills. Damaging the credit, but hopefully not as bad as a bankruptcy.

Thoughts? And please, if you want to flame me, wait until I can handle it.

Thank you. I know we have a lot of savvy and intelligent people on here.

[Jennifer L.]

I don't know much about this kind of stuff, but I wouldn't declare bankruptcy if you could help it.

And I'd get to NM ASAP if your health is that bad. Nothing else can top that for importance.

Good luck.

Jennifer

[fantasymaker]

Your credit willbe ruined either way.
Plan B and 1/2
Go to NM NOW while your credit is still good and get your place.
THEN
Go to the morgage lender and say hey It aint gonna happen how do we do this to both our benifit?
Be firm. "We have become unemployed we will not be staying here and we dont really care about you so what sorta deal do you wanna make that will be of some benifit to us? We have and willbe getting NO MONEY in the forseeable future."
What you want is to walk away and leave them a asset in as good shape as you can so they can recover as much as they can.
You might offer to sell it at auction with the agreement that they take whatever is offered and do not come after you for more. Just as they would in a bankrupcy but without them or you spending the bucks on a lot of leagal proceedings and them getting the asset sold much sooner and in better shape and you getting things over and cleared up much faster.

REEVALUATE ALL your bills and try to do them as above if you wont be NEEDING the item.

[chickenista]

I have a potential third option...
Can you go to NM now and rent out your old place for the payments? Others that are in your position and have already lost their place are going to need places to live.
I do not know if it would work for you, but that is a choice to consider

[ihedrick]

It woudl be good if the mortgage would settle for amount sold. But around here alot of homes are selling for a quarter of what the balance owed is. Is the mortgage equal to the rent of similar places in your area? I'd talk now with the mortgage people and see what you can get worked out. Keep your health your top priority though.

[Bonnie L]

I can't give money advice, but do move as soon as possible. Your health is important. In the old days, people with asthma & TB would live in tents, they we so desperate for the drier, healthier climate.

[amylou62]

Do what you need to do. Credit can be repaired. Your health is most important.

I agree with fantasymaker, go now and get settled while your credit is still good.

Bankruptcy is not death. Everybody is in a world of hurt right now.

GET GOING!

[Madame]

See if you can rent your place out. If not, talk to an attorney to see what your best choice is.

[Nevada]

The only debt you mentioned was your mortgage. You don't need to file bankruptcy over a foreclosure. If your house is foreclosed on, they will take the house but they won't go after a deficiency judgment. The only thing on your credit report will be the foreclosure, which is becoming all too common today.

If you can sell your home for the amount of the mortgage (or more), then sell it. You can consider renting your home out, if you can command enough rent to cover the mortgage, insurance & taxes, but doing that will leave behind a huge dangling obligation. You won't be able to monitor the condition of the house from a different state. Also recognize that you won't be able to command as much rent in the upcoming depression as you can now. If there's any question in your mind, walk away from it now.

If you consider bankruptcy it won't be over a single debt like a foreclosure. You should only consider it if you can't meet your other obligations. Right now there's no way to know what your future holds. You need to take care of your health first, then wait and see how the rest falls together.

There are alternatives to bankruptcy. A lot of people practice "debt avoidance", by putting off creditors using techniques found in AJ Hunnicutt's book.

http://edenpress.com/showbook.asp?index=669@2@B

That book basically teaches the reader to be scoundrel, but I don't see how it's any worse than going bankrupt. You just put off the creditors with skillfully written letters until the statute of limitations for your state makes it an noncollectable debt, which is 4 years in New Mexico (that's 4 years from the last payment you made to the creditor).

[Welshmom]

I've wondered about this type of situation. A friend was in a similar place.
If you went to NM and bought a place there, wouldn't that be jeopardized if you tried to walk away from the other place later? Couldn't the mortgage company put a lien on anything of value you owned?

[NorthCountryWd]

We rented our house for 20% more now than we could have during the boom. Rents are high right now because no one can get a mortgage.

I'd look into renting the house out first, you might be pleasantly surprised.

[Nevada]

Originally Posted by Welshmom

Couldn't the mortgage company put a lien on anything of value you owned?

Yes, it's legally possible to do that. It's called a "deficiency judgment". The "deficiency" is the difference between the amount owed on the mortgage and the price the home brought at the foreclosure sale. However, mortgage companies almost never go after a deficiency judgment. I say "almost" never because if there was an extenuating circumstance, such as blatant vandalism to the home, it's sometimes considered.

The reason that deficiency judgments are seldom pursued is that they recognize that the only reason a homeowner would walk away from his home would be due to extreme financial difficulty. They know that even if they had a deficiency judgment the debt would be difficult to collect. Since pursuing a deficiency judgment requires perhaps $4,000 to $5,000 in legal fees, mortgage companies consider it throwing good money after bad.

They loaned the money as a secured debt, and they got the collateral back in good shape. Banks generally consider that to be enough. Besides, if a complaint seeking a deficiency judgment is filed, more times than not the debtor will just file bankruptcy anyway.

[halfpint]

Originally Posted by Welshmom

I've wondered about this type of situation. A friend was in a similar place.
If you went to NM and bought a place there, wouldn't that be jeopardized if you tried to walk away from the other place later? Couldn't the mortgage company put a lien on anything of value you owned?

I think it depends upon the states involved, but I have some friends that that happened to. If they had not owned any property according to their lawyer there would have been a judgment made against them and any wages would have been garnished. They now owe more on their newer house than they paid for it, and the value has dropped.

I would go to the mortgage broker and see if something could be worked out. If you can keep the payment low enough, you might be able to rent to cover the mortgage, taxes and insurance, and go ahead and move. In our area although there are a glut of houses for sale, there are very few for rent, and most of the rentals get snatched up quickly.

Dawn

[Maura]

Go to your mortgage holder and talk it out. They may be willing to let you make partial payments, taking the rest onto the end. You will pay more in interest.

As for your breathing... Do you take vitamin C? Get a high quality C (health store, not Walmart) and start with 1,000 mg every four hours. If that doesn't help, add 500 in increments until it does. There are also pressure points that will help your breathing, such as the breastbone. If you go to a massage therapist, he or she can probably help you. You are under a lot of stress right now and your body is reacting with the asthma. Relieving the pent up stress with massage alone will help, but many body workers know other techniques that can.

I almost never suffer from asthma any more. My recipe: every day take garlic pills, a pinch of tumeric, Vit C; every week, energy work (from massage therapist)

I wish you the best.

[Sonshine]

Originally Posted by chickenista

I have a potential third option...
Can you go to NM now and rent out your old place for the payments? Others that are in your position and have already lost their place are going to need places to live.
I do not know if it would work for you, but that is a choice to consider

I agree with chickensista. We moved from Florida to Georgia because of DH's job. We couldn't sell the house in Florida, so we have renters in it. It pretty much covers the house payment, although we still have to pay the homeowners association.

[edcopp]

Move now to a healthier place. Rent living quarters, and let the chips fall where they may.

Other option, become an obituary.

It's a no brainer. Save the thoughts of going bankrupt for a year or two. In the meantime develop a new life style.

[Pink_Carnation]

With bankruptcy you won't walk away with cash either...if you have savings they can and will take it. With forclosure they can do the same thing. Either will hit your credit but you really need to talk to a bankruptcy lawyer to see what will happen. Can you also give up the truck and payments?

If the only thing you really need to get out from under is the mortgage I would probably do the foreclosure and start calling some churches and such in NM to see if there is anything they can do to help you get out there and get started for your health.

[Callieslamb]

Until Feb, I would put my place down to as low of a price as could to get it SOLD. Until Feb, you still have good credit. While you are waiting for it to sell, get to NM. Do you have good friends you could pay a small fee to watch the place and show it to potential buyers so you don't have to go through a realtor?

Other than that, I agree with others - salvage your health, not your credit.

good luck.

[Beeman]

First I would get rid of the extra junk expenses, you're not exactly living cheap and it wouldn't matter where you went if you have cell phones, XM radio, satellite TV and 2 truck payments. Sell the trucks get rid of the extras renegotiate your mortgage and find better employment possibly 2 jobs. I feel for your health problems but is your husband working extra yet? Horses!, sorry that's the number one hole in your budget.

How will bankruptcy free up a lot of cash?

[snoozy]

Your credit will only be bad for 7 years. After that, you're clear. For that matter, if you have not "participated" in the credit world for 5 years, you don't get the benefit of your good credit either. I learned that I had no credit score at all, despite having run a company in good standing on all accounts for 11 years, because it was more than 5 years prior, and since I don't use credit cards or buy on installment, I simply did not exist. And within a month of filing bankruptcy, you will have plenty of offers for new credit cards (if you want them) -- because by law you will not be able to go bankrupt again for another 7 years. At least that is how I understand it from other people's experiences.

But really: none of it will matter if you're dead.