I have had one h%ll of an ordeal with a house that was foreclosed on last year. The holder of the home equity line got shorted in the foreclosure, and is now pursuing me, through Wolpoff & Abramson, for the deficiency of $25K. I am a stay at home mom to two very young kids, and the only assets I own outright are a couch and a 10 year old station wagon. Everything else is my husband's, totally in his name, and we don't live in a community property state. We can't afford to pay this amount back. BK 7 is not an option due to spouse's income (which is good on paper, but barely covers necessary expenses), and we can't afford BK 13 payments for my debts on top of our regular living expenses. We have reduced our cost of living by about 20% recently so please no lectures about ways to economize...we've already done it! We just got the first W&A letter two days ago, and I plan to respond with a request for validation. However, it should be pretty easy for them to put their hands on a signed loan document. We're in the process of moving to a different state, and I am minimizing the signs that might point them to me - no forwarding address or number, unlisted number in the new state, etc. Do I have any options to fight back or do I just have to take the inevitable judgements and hope they don't renew every 10 years?? Thanks Poochie
If his income barely covers expenses, why can't you file Chapter 7? Have you spoken with a bankruptcy attorney? If the debt is only in your name, you can file bankruptcy by yourself. I suggest you consult an attorney about this possibility. You're not going to be able to hide from them, considering that your husband is with you. Something will trip you up, eventually.
I can't file BK because even though it is a debt that predates the marriage and we are not community property state, the BK courts consider household income, not individual. We've met with a BK lawyer and consulted another by phone, and the answer is the same. The best we can hope for would be a 13, but we are stretched to breaking and can't make BK payments for me on top of spouse's debts. The BK attny said 7 wouldn't fly because spouse has a large car payment, committed to before marriage and kids, and also is repaying several 401K loans. He can't get out of the lease early without screwing up his relatively pristine credit, and he needs his credit score for his job. I've checked judgmet SOL in both our current state and the one we're about to move to, and neither says renewable, although other states SOLs do have that remark...are all judgments renewable or does it vary state to state?
If this is the case, take your name off the bank accounts and you are judgement proof (see my post "Making Yourself Judgement proof"). Then W & A can get their judgement and stick it up their a$$ for all the good it will do them.
thats some good advice, but ask your lawyer. $25K is alot. don't want you to take any actions that might be deemed fraudulent or look bad if you do decide to BK. You can just sit the game out for 7-10 years and rebuild your credit if you're gonna stay at home and be mom and tell them to flip off . IMO, IT IS ALWAYS IMPORTANT TO KEEP your credit checking etc separate with your loved one. If it is necessary to TANK your credit to keep the house over your head, at least one person can have good credit while the other is rebuilding. This is exactly why i'll never have joint anything that i don't absolutely need or even AU's.
What's more important, the large car payment or your sanity? It appears that you are going to have to make some difficult decisions. If the bankruptcy attorney thinks you both make too much to file bankruptcy, but you're saying that you live hand to mouth, it must be because you're spending on wants instead of needs.
Check your budget. You need to take a good look at your budget. Check with the local bankruptcy court and get their financial guidelines. It's hard to believe for me that you make too much money without having a somewhat extravagant lifestyle as my understanding is that Bankruptcy courts had a reasonable living budget for expenses. Do you have some unusual life necessary expenses - medical, food, etc. - that you have not told the lawyer. Have the lawyer give you specific reasons why you make too much money.
Check your budget. i have a friend who's wife business failed when the tech bubble burst. She filed BK and they had to use his income but they also deducted his loans and expenses. If your budget is that tight I would get a secoond opinion from another attorney. Second choice is dont have any joint accounts make yourself judgment proof and ride out the storm.
Check your budget. couple HUGE problems here: 1) HE loan - what was the LTV of the mortgages? I can't figure a $25k deficiency unless you had 100%+ financed. (see why i dispise 80/20 loans!!!!) 2) the lawyer you talked to is a twit. sorry, but true. if you include your husbands debt with an individual income they need to take into account his debts as well, in addition to two children. talk to different attorneys as well as the bankruptcy court clerk about this. good luck!
