File now or stall to buy time to sell house?

[joeranger]

I am trying to help a relative who, at the end of his years, used credit cards and a home equity loan to live on until he could sell his home. The home and property are very hard to appraise and might take a long time to sell.
Home value $500-$700k depending on economy and time to sell
Only income $2,000 month Soc Sec
Home equity loan due in April $300,000
Credit Cards - $78,000 (Mostly fees from using one to pay another)

If we can buy time to sell the home for what it is worth, we can pay everything off. If we are forced into something the fees and penalties are growing exponentially , and are eating up equity.

The bank holding the home loan is waiting to see what Obama does before they refinance. You cannot list property for sale while applying for a loan.

Help!!!!!

[OhioFiler]

No one will throw an old man out on the street. I say stay in the home as long as possible. How much equity does he have in the home?

[joeranger]

That's the big question. If he has to sell immediately, who knows what the property would sell for. If he had a year, maybe he could settle all his debts and have $50-150k in equity.

[ansky0007]

Unfortunately if they have that much equity in the home most likely the trustee would take it and sell it anyway. You need to get a good appraisal and get a real value for it.

[joeranger]

Unfortunately if they have that much equity in the home most likely the trustee would take it and sell it anyway.

Not a problem, unless the trustee is so eager to sell that the sale only covers the debt and no equity is left.

[ansky0007]

Not a problem, unless the trustee is so eager to sell that the sale only covers the debt and no equity is left.

He does not care if equity is left, Anything that they can get to pay the creditors back they make around 10% for themselves. If they can sell the home and get $100k after exemptions they can get $10k for themselves and pay the $90k back to your creditors.

[StartingOver08]

That's what Trustee's do - remember they are looking out for the creditors, not the debtor. So once they have their own fee and the creditors payments, there is no incentive for them to get you top dollar.

[haggerty]

If you have equity, and you think the property will sell, and fairly quickly, speak to your lender about giving you a mortgage forbearance for several months where you would either be able to suspend all mortgage payments for that period or just make token payments so that you have time to sell the home. Since you have equity, they see little risk in agreeing as they will get their money when you sell (without having to put you through foreclosure and trying to sell it themselves). They will ask to see your signed listing agreement with a realtor to prove you have the house on the market and that the loan amount will be more than covered by the selling price.

I did this with my mortgage lender -- the problem is the house has sat on the market for eight months (at WAY below market value) and my forbearance period is ending. Am considering filing Ch. 7 in order to invoke homestead exemption and avoid a judgment lien, thereby allowing the trustee or me to drop the house even more and still get enough cash to get a simple re-start on life with my terminally ill husband.