“Dear Steve,
3 yrs. ago, I bought the house that I had rented for 14 yrs. It was a real fixer-uper. I borrowed aprox. 20k extra with my original motgage and also ran up another 10k on credit cards to remodel the inlaw aprt. downstairs. I then refinanced, paid off the credit cards, and took out aprox. 30k extra to remodel the upstairs while I lived in the inlaw apt. downstairs. I ran up aprox. 35k in c.c. debt and although I was able to move upstairs, it is not finished.
Although I am renting out the inlaw apt. I still had trouble paying the c.c.bills. Although I am current with the mortgage, I’m living in an unfinished home(needs aprox.20k to finish) and I haven’t paid the c.c. bills in aprox.9 mos. and now my credit is bad and I’m not sure what to do. I don’t think I can refinance with bad credit and an unfinished home, and I’m being hounded by the collection companies.
Paul”
The Answer:
Dear Paul,
If you want to stop the hounding, your choice is bankruptcy. If you want to keep the home, then you are probably looking at a Chapter 13 bankruptcy.
Outside of that you have no other legal rights to stop the collectors except to send a cease and desist letter but that is just begging to be sued and does not solve the underlying problem.
I doubt you can lower your expenses any further or increase your income so that’s it. One more option, hand back the house, discharge all your debt in a Chapter 7 bankruptcy and start over.
I think you should contact a couple of local bankruptcy lawyers, find one you like, and setup a free bankruptcy consultation appointment to go in and talk about your situation and how can bankruptcy can assist you.
