What's the lesser of two evils: Foreclosure or Debt for the next 10 yrs?
This is related to a short sale with a second mortgage (HELOC) that wants us to settle a 60K debt for the next 10 years. We have a buyer and can let the sale go through with those terms. Our other alternative is to let the whole deal fall and just go into foreclosure. Which deal is better in your opinion. Thanks.
Posted June 26th, 2010 in Debt Settlement. Tagged: 10 years, foreclosure, heloc, second mortgage, short sale.
Well, with foreclosure its not an end deal. What ever they lose by disposing of the property they can come after you for. So say you let them foreclose, and they sell the property for $45/K. You owed 60/K so they can come after you for the balance of $15/K plus expenses of the foreclosure and sale. Then your only option is to file for bankruptcy and depending on your situation, you will either be relieved of the debt entirely or end up in 13 and paying a payment for the balance. Or you can assume the 60/K debt and live with it and hope you can pay it off in 10 years and move on. 10 Years is a LONG time, and you’ll be strapped the whole time unless you make good money. Tough call….
June 26th, 2010 at 9:32 amforeclosure is a better option the debt in my opinion
June 26th, 2010 at 9:32 amSorry but the debt is the way to go. Foreclosure is no right-off and it will severely impair your ability to borrow in the future. Pay off the debt.
June 26th, 2010 at 9:32 amIt depends on your own personal views…as far as your credit report is concerned, they will show as pretty much the same thing with the same consequences.
June 26th, 2010 at 9:32 amThe best deal would be to never get into that type of situation. Have you looked into loan modification? It can possibly lower your payment and you can keep your house.
June 26th, 2010 at 9:32 amthe bank can still come after you for that $60,000 – it’s not going to go away just because you foreclose – you may have to declare bankruptcy for that much money
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June 26th, 2010 at 9:32 am