Need Advice-BK after Foreclosure?

[yellowjacket]

-I live in CA and bought a investment property in Lousisiana.
-It foreclosed in 2008. The lenders have posted a debt to be collected over 60,000.
-I have good credit other than the loans and foreclosure associated with the investment property. My score went from a 645 to 550 once the collection posted to my credit.

Here's my question:
Do I file for bankruptcy or not? I have seen two attorney both contradicting each other. I would like to buy a house again as soon as possible.

-One attorney asked if I had a judgement, and I think I do because I received a 1099 for my 2008, taxes. Because everything was done out of state I have no information on it. Nothing.

[justbroke]

You received a 1099-A/C? If it's both a 1099-A and a 1099-C, then that's interesting. We'd probably need to know what type of 1099 it is.

I don't understand the "lenders have posted a debt"? Is it with a collection agency?

[yellowjacket]

Reply

Yes a collection agency, I dont remember which one it was, but it was the one that says I am responsible for the balance. Which that in itself I don't understand because it was my first home purchase.

[justbroke]

Yes a collection agency, I dont remember which one it was, but it was the one that says I am responsible for the balance. Which that in itself I don't understand because it was my first home purchase.

The property was in Louisiana, so you don't get to enjoy that nice California "purchase money" non-recourse loan provision. Besides, you bought it as an investment property, so it really has no affect for you because the California provisions are for primary residences.

It must have been a Form 1099-A, Abandonment or Acquisition of Property. If it was Form 1099-C, I don't see how they could have sent it to a collection agency. If you're right and it was 1099-A, they didn't forgive the debt and assigned and/or sold it to a collection agency.

I'm not sure you have many options other than paying, avoiding them (probably worse), and/or filing bankruptcy. I'm unsure if you'll even be able to obtain any financing (real soon) since you have a foreclosure. It could be 2 years before you can get bank financing for a new home.

[yellowjacket]

'When you say 2 years, that is if I bankrupt correct? I am sure if I avoid them as you stated is the worst option, I shall never be able to purchase another home.

[yellowjacket]

My brother has investigated and met with attorneys and come to conclusion, that you can ignore the debt and the collector can only report the debt for so many years, which is less than a bankruptcy.

[justbroke]

My brother has investigated and met with attorneys and come to conclusion, that you can ignore the debt and the collector can only report the debt for so many years, which is less than a bankruptcy.

For a $60K debt, there isn't any ignoring. The creditor can, and probably will, move for a judgment and then get a judgment lien to attach to any of the debtor's property.

Debts in this amount should not be simply ignored. While the creditor can only report for so many years (7), they also have other timelines working against them... most notably the statute of limitations (SOL).

If a creditor gets a judgment and records a judgment lien... that judgment can last many years. In most States, that judgment can also be renewed once, twice, or even thrice. In Florida, for example, judgments liens are for 5 years and can be renewed for another 5 years.

Again, $60K is a serious amount of money and, unless you are so-called judgment proof and will continue to be judgment proof for 10-20 years... I wouldn't take the option of "ignoring" seriously.

Hey, but that's just me and what I understand. I am no lawyer. Also, never take 3rd party legal advice. Always ask your own lawyer personally to evaluate your situation.

[yellowjacket]

Thanks