Flip flop. Tick tock. HELP! To go BK or not to go BK, that is the question!

[HakunaMatata]

[gwar11d2]

If the house loan has a deficiency judgment on it, you might have to claim bankruptcy anyway... I would just do a clean sweep.

I am you, only maybe 5 years later. I have a house in Detroit that has dropped from 135 down to _maybe_ 10K at an auction. I moved out of state and was renting the house for a few years. My tennants lost their job, stopped paying rent, so I couldn't pay the mortgage + the endless repairs on the house. I stopped paying on the mortgage 3-4 months ago (should have done it 5 years ago). Now my CC debt is so high that I can't afford even the minimums.

I'm filing Chap 7 here shortly..... Why pay on the credit cards if youd don't have to? Debt free worry free renter sounds like a plan to me

[HakunaMatata]

If the house loan has a deficiency judgment on it, you might have to claim bankruptcy anyway... I would just do a clean sweep.

I am you, only maybe 5 years later. I have a house in Detroit that has dropped from 135 down to _maybe_ 10K at an auction. I moved out of state and was renting the house for a few years. My tennants lost their job, stopped paying rent, so I couldn't pay the mortgage + the endless repairs on the house. I stopped paying on the mortgage 3-4 months ago (should have done it 5 years ago). Now my CC debt is so high that I can't afford even the minimums.

I'm filing Chap 7 here shortly..... Why pay on the credit cards if youd don't have to? Debt free worry free renter sounds like a plan to me

Thanks Gwar! You touched on my biggest fear, a deficiency judgment! Despite reading countless articles indicating DJs are rarely issued on primary residences with single loans (my situation), I'm still not comforted. I just can't understand why a lender wouldn't wish to pursue a DJ...especially in a case such as mine where I have the potential to be debt-free in the years following foreclosure. Plus, I suspect we may see changes in this domain in the near future. Without doubt (unless I win the lottery and the odds aren't good since I don't play!), a DJ would send me straight into BK. Excellent point to ponder!

Sorry to hear about your situation. The Detroit market is awful! Just be glad you will soon be officially free of maintaining that property!

Debt free and worry free...sounds great. It's the worry part that's making my decision challenging. I'm working on this and your feedback is greatly appreciated!!

[backtoschool]

I would file bankruptcy if you are sure you are going to foreclose.

Your credit will tank from the foreclosure anyway, so not filing bankruptcy is not saving your credit score.

Deficiency judgements can be huge. You may need to file anyway and this way the hit to your credit report happens all at once.

Less bills, means more savings, means more options for your future. (like getting out of that job you don't like, etc....)

Just my opinion....

[HakunaMatata]

I would file bankruptcy if you are sure you are going to foreclose.

Your credit will tank from the foreclosure anyway, so not filing bankruptcy is not saving your credit score.

Deficiency judgements can be huge. You may need to file anyway and this way the hit to your credit report happens all at once.

Less bills, means more savings, means more options for your future. (like getting out of that job you don't like, etc....)

Just my opinion....

Backtoschool-

You're echoing my favorite consult attorney. He recognizes my ability to recover from cc debt; although, he said if I'm going to take the hit (foreclosure), I might as well do so with a clean slate (bk). He doesn't seem to think I'll get hit with a DJ (He explained banks typically bid the full amount at the Sheriff's Sale. Times are changing and this isn't happening as frequently as it did in the past).

Wow...love the less bills, more money, and a NEW job possibility! My sanity may very well be restored in this scenario! Thanks!!

[backtoschool]

Backtoschool-

You're echoing my favorite consult attorney. He recognizes my ability to recover from cc debt; although, he said if I'm going to take the hit (foreclosure), I might as well do so with a clean slate (bk). He doesn't seem to think I'll get hit with a DJ (He explained banks typically bid the full amount at the Sheriff's Sale. Times are changing and this isn't happening as frequently as it did in the past).

Wow...love the less bills, more money, and a NEW job possibility! My sanity may very well be restored in this scenario! Thanks!!

Well from personal experience, I am using my bankruptcy to reset and change my whole life. (hence the nickname "backtoschool") A new start means just that: a chance to have a life that makes you happy and fulfilled without the insanity that spiraling debt and expenses cause.

I just moved BACK to Michigan in January, from nyc where I was living for the last ten years. (yes I am the ONE person in the world who has moved to Michigan this year, lol) I start graduate school for a second graduate degree in a week and I am the happiest I have ever been in my life, even with this bankruptcy going on, so I can tell you from personal experience, making a decision and moving forward with it will open doors for you that you can't see right now.

[Kpower]

According to my lawyer if you forclose you cannot get a FHA loan for 3 years whereas if you file BK then you qualify in 2. Even if you give up the house in the BK. Not sure if this relevant to you or not though. I have personally been doing a lot of thinking about the relative merits of renting versus owning and I would have to say renting is the way to go for us right now even besides the BK. We have more amenities than we could afford in a house we owned. We pay less per month for more space. We have zero maintenance costs and in the last year I had to pay 5k or so for repairs to the house.

In a good economy where housing values are rising steadily then owning a house can be beneficial. I will personally not buy another house unless I can pay double the mortgage and still save money. This way the house will be paid for in 7 years and I will have a nest egg for updates to sell it for maximum profit. Thats just me though.

[HakunaMatata]

Well from personal experience, I am using my bankruptcy to reset and change my whole life. (hence the nickname "backtoschool") A new start means just that: a chance to have a life that makes you happy and fulfilled without the insanity that spiraling debt and expenses cause.

I just moved BACK to Michigan in January, from nyc where I was living for the last ten years. (yes I am the ONE person in the world who has moved to Michigan this year, lol) I start graduate school for a second graduate degree in a week and I am the happiest I have ever been in my life, even with this bankruptcy going on, so I can tell you from personal experience, making a decision and moving forward with it will open doors for you that you can't see right now.

LMAO...I suppose I won't ask why you moved BACK to Michigan!! Too funny...I want OUT! I always thought a career would propel me away from here. Unfortunately, I haven't figured out what I want to be when I grow up!

Thank you for infusing new thoughts into my equation! My current job pays for education (I would like to complete my on-hold-because-my-job-sucks Master's and pursue another degree). Unfortunately, I'm not permitted to take advantage of this perk because my work schedule changes like Michigan weather.

I've been quite focused on ending the financial insanity (my Money Pit reminds me daily) rather than positively projecting into my future. In terms of the future, I've invested time into understanding credit effects, future home purchases, renting, and fear (ex/ what if something drastic occurs in my world and I don't have financial means to fix it). Thank you for expanding my view! I feel like I'm on a game show and doors are positioned ahead of me. Which door do I open? Who knows...I may be following you "backtoschool"!!

[backtoschool]

LMAO...I suppose I won't ask why you moved BACK to Michigan!! Too funny...I want OUT! I always thought a career would propel me away from here. Unfortunately, I haven't figured out what I want to be when I grow up!

Thank you for infusing new thoughts into my equation! My current job pays for education (I would like to complete my on-hold-because-my-job-sucks Master's and pursue another degree). Unfortunately, I'm not permitted to take advantage of this perk because my work schedule changes like Michigan weather.

I've been quite focused on ending the financial insanity (my Money Pit reminds me daily) rather than positively projecting into my future. In terms of the future, I've invested time into understanding credit effects, future home purchases, renting, and fear (ex/ what if something drastic occurs in my world and I don't have financial means to fix it). Thank you for expanding my view! I feel like I'm on a game show and doors are positioned ahead of me. Which door do I open? Who knows...I may be following you "backtoschool"!!

Well I wanted out of michigan too when I moved to nyc ten years ago. Then I found myself in a badly-acted-and-directed-made-for-tv-movie-cliche of a career and life. (wall street is everything you saw in every bad movie ever made about it...)

My family is here, its where I grew up, and I am going to a very highly rated program at a good school and have a fellowship. This all gave me an excuse to come home and stop the insanity. Believe me the grass is always greener somewhere else.

[HakunaMatata]

According to my lawyer if you forclose you cannot get a FHA loan for 3 years whereas if you file BK then you qualify in 2. Even if you give up the house in the BK. Not sure if this relevant to you or not though. I have personally been doing a lot of thinking about the relative merits of renting versus owning and I would have to say renting is the way to go for us right now even besides the BK. We have more amenities than we could afford in a house we owned. We pay less per month for more space. We have zero maintenance costs and in the last year I had to pay 5k or so for repairs to the house.

In a good economy where housing values are rising steadily then owning a house can be beneficial. I will personally not buy another house unless I can pay double the mortgage and still save money. This way the house will be paid for in 7 years and I will have a nest egg for updates to sell it for maximum profit. Thats just me though.

Great points! I've read obtaining a mortgage following BK is easier to do than following a foreclosure (this is actually on my pro-BK list!). Since I deem myself a proverbial renter right now (most homeowners in my area fall into this category with underwater properties), I'm okay with the notion of renting. At a straight monthly cost, my rent will actually be more than my mortgage payment. When I factor repair costs into the equation, renting is the best financial option! Like you, I don't intend to purchase another house without serious evaluation. Despite all the encouraging words of wisdom from elders when I decided to purchase my first house, I've learned an important lesson...they aren't always investments.

[fooked]

Hakuna, when it comes to filing, I'd say go with your conclusions from your research...

eliminate the emotion and consider it to be a business decision, which it is...

do some planning (which is what I'm researching like crazy) and do whatcha gotta do...

considering going back to school as well.. good luck to you!

[frogger]

.

Bankruptcy -Free myself from the house AND credit cards. Become a debt-free renter.

Thanks!

Debt free, no maintenance expenses to have to worry about, and no burdens with the cc bills and other things?

Looking good to me!

[HakunaMatata]

Hakuna, when it comes to filing, I'd say go with your conclusions from your research...

eliminate the emotion and consider it to be a business decision, which it is...

do some planning (which is what I'm researching like crazy) and do whatcha gotta do...

considering going back to school as well.. good luck to you!

Thanks Fooked! The emotion is ebbing; although, I'm confusing myself with the "what ifs". At this point, I'm filing for BK to eliminate $20k in debt and a potential (not guaranteed) deficiency judgment. The element that is most bothersome is the DJ. If I knew this would be pursued, I'd have no problem justifying BK since I don't have an extra $60k in my back pocket. My research indicates this rarely occurs in my situation. I'm not a gambling chica and I wouldn't want to have this possibility hanging over my head for years. Ugh. To top it off, I keep thinking what if I need BK in the future? What if I lose my job? I've already experienced job loss (the impact is partially represented in my CC debt). What if something medically goes astray and I don't have the means to provide for myself? What if I spontaneously combust? Okay, maybe I'm not THAT extreme...I'm sure you understanding what I'm communicating. The what if possibilities all have a measurable, business-esque platform (except the combustion because I wouldn't have to ponder BK in such a scenario).

[HakunaMatata]

Debt free, no maintenance expenses to have to worry about, and no burdens with the cc bills and other things?

Looking good to me!

Frogger-

Ahhhhhhhh...a refreshingly simplied solution to what I'm making ultra complex! Thanks!

All of those things sound great to me EXCEPT I'm playing a game of Frogger (loved that game!). I feel like I'm standing on the side of the BK road, prepared to cross, and I have to avoid countless "what if" scenarios. I'm a competitor and I need to keep my focus so I can make it across the street. Gosh, I appreciate all of you so much! I'm growing leaps and bounds! Ribbit!