Is there a legal way to stall litigation for a week

[kmfleg]

We got the call yesterday that Capital One is going to litigate if we can't settle. I didn't get the message until today because we were out of town yesterday. I got a preapproved Equity loan through Ditech today to take care of the obligation and they are upset they might have to wait a few days and want me to get a line of credit for immediate turn around. For us the best thing is a 30 year equity loan to consolidate and wipe out all debts. I don't want an equity line and am afraid it will make our financial situation worse then it already is. Is there a legal way to stall them until we close? We should close next week. We tried to work it out previously with Capital One by coming up with a payment plan and they have totally been inflexible. We were behind on several debts and they are the only ones who flat out refused to work with us. Everybody else came up with payment terms we could afford. I don't know what to do and am so annoyed with the company that I will forever permanently black list them when we do get our finances back in control. I have severely handicapped child. We don't have access to early head start, we can't get a florida medicaid waiver for many more years, we don't qualify for SSI and private insurance won't pay for nursing so I had to quit my job and this is how we got into the financial mess to begin with. Any advice would be so much appreciated.

[HHM]

OMG, a 30 year home equity line of credit, that is insane (that should be categorized as predatory lending). You are right to be skeptical about doing an equity line of credit (note, HELOC's compound interest like credit cards). There is no way that will help you in the long run.

First, is there any reason you cannot declare BK, if there is anyone who is the poster-child for why people need to declare BK, it is you (based on what you have shared so far.). Why use Secured debt (your home) to pay off unsecured debt. Your situation doesn't seem like it is going to improve, so I would NOT pay off your unsecured debt with secured debt...because when BK finally does come your way, it won't help you and you could lose your house.

Without knowing more, if I were you, I would tell ditech to shove the deal up their a**, and go visit a few BK attorney's and find out what your options are. Your instict is exactly right, if you take this Equity line of credit, IT WILL ONLY MAKE THINGS WORSE.

On the one hand, you say you don't want the equity line of credit, but then you say you are waiting to close. Which is it?

As for litigation...there is nothing you can really do to stop them from filing the complaint, but don't worry about. Once they file the complaint, then they have to serve you with the complaint and summons. That takes time. Once they serve you, you will have 20 days to respond to the lawsuit. Once you respond, it could be another 2-3 months before you go to court. So what I am saying is, don't freak out about the lawsuit.

[sisterfunkhaus]

I agree with the idea that you should rethink that loan. You sound like you need BK. PLEASE rethink gambling your house to repay these debts. You have a severely handicapped child who needs a roof over his or her head. There is no honor in losing your house one day up the road to pay off unsecured debt. You do realize that by putting up your house that you are turning unsecured debt that can be cleared in BK into secured debt that you cannot charge off in BK?

And ditto to what HHM said. Telling you over the phone that you are going to be sued doesn't mean jack. They have to serve you first, then you get to answer (Make sure to answer) then 60-90 days down the road you go to court. They are just trying to scare you into paying NOW. They know that every minute they are put off increases their chances of not getting paid.

[HHM]

Just to give you some idea of how this works, lets say you take out $20,000 in a 30 year HELOC at 6.99 percent APR, you will pay about $1,400 in INTEREST in the first year alone.

[SinkingFast]

HHM and your gut instincts are exactly right about the 30 year HELOC.

We had a 10 year HELOC that converted to a 15 year traditional note at 10 years. It came with some sort of teaser rate for the first year and then the interest only payments set in. We paid extra during the first year before the $350/mo payments kicked in. When we paid off the loan 4 years later, we paid back $800 less than we borrowed. The $800 paid on the principal was mostly from the extra we paid during the first year of teaser rate on the loan.

Also true that by mortgaging your home, you are trading unsecured debt for secured debt. Unsecureds can be discharged in BK. Secureds can't,...... Unless,..... You are willing to walk away from your home. If you want to keep your home down the road, then you should seriously consider investigating BK.

Call 3-4 attnys and see about scheduling Consults. Generally Consults are free and you'll get some professional opinions of your situation.

I'd also recommend you chat with a professional Credit Counselor and get another perspective. Check out one of the DOJ approved Credit Counselors available in your State. You may have a local office where you can go, sit down, and chat face to face. Or maybe you can do a phone or online session. Here's a link to find the DOJ approved Credit Counseling Agencies for your State:

http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm

[kmfleg]

Ordinarily I would agree with the sentiments not to go the equity loan route but unfortunately our house isn't exempt under bankruptcy laws due to the acreage it is on. It sitting on .6 acre lot and in an incorporated city. They only exempt up to .5 acre lot so we will lose the house regardless if it hits bankruptcy. We don't have enough assets for the creditors to take so the house is pretty much the only thing of worth they can sink their teeth into. The cars are worth some money but they are both old and high mileage cars. The loan we are getting is a second mortgage not an equity line. The legal firm was the one who wanted me to get an equity line and I refused. If I thought I would be guaranteed not to lose the house I would file bankruptcy and be done with it.

[CindyLou]

well, wouldn't the first .5 acres be exempt? You only technically lose the .1 acre?? (or the value of it?) Am I missing something? You would still get your exemption. What is the approximate value of that .1 acre? Would it be worth the trustees trouble to sell the house to get it? Could you pay him for it some other way?

[HHM]

well, wouldn't the first .5 acres be exempt? You only technically lose the .1 acre?? (or the value of it?) Am I missing something? You would still get your exemption. What is the approximate value of that .1 acre? Would it be worth the trustees trouble to sell the house to get it? Could you pay him for it some other way?

I agree, I don't think you lose the exemption out-right if your lot exceeds the size requirement.

What state are you in? This is the first I have heard of a home equity exemption that designates a certain lot size for the exemption to apply.

[SinkingFast]

Good point, Cindy!

There have been people post here that Trustees simply abandon parcels of land they owned. No Exemption applied. The Trustee just did not take it.

One parcel was decent size. Several acres. But it was land-locked. Trustee had no interest and abandon the property. No Exemption was applied.

Another poster owned a parcel of land, jointly held/Titled with a group of other people. Again, no Exemption applied. The Trustee abandon the property.

The Trustee can't simply lop off 0.1 acre of land and sell it. There's probably rules and regulations in place that a building site must be a minimum size. Unless one of your next door neighbors happened to be interested, that's about the only way the Trustee could sell that size parcel of land.

Most likely, worst case scenario,............ You'd get to play "Let's Make a Deal" with the Trustee. The Trustee would settle with you for the value of a tenth of an acre based on your local market value. As an example,........ If a one acre building site typically sells for $5K, the Trustee may settle with you for $500.

Trustees want MONEY. The easier, the better.