Our House is Worth Less Than Half of What it Was and Our Income is Down 30%. – Brian

“Dear Steve,

In substantial debt and considering best option to get out of it.

My wife and I have $104K in unsecured debt, owe $510K on our home that is now worth $230K, and we have seen a 30% reduction in our income this year which is the straw that broke the camel’s back. Our expenses now exceed our income. We have a child who will be ready for college in 3 years and want to be able to help him with college when the times comes. What is our best route to get out of this debt?

Here are my options as I see them:
1. Short Sale of home and rent, along with debt settlement to get rid of unsecured debt.
2. Chapter 13 BK that would allow us to stay in our home and get rid of the debt in 5 years.

Any advice is greatly appreciated.

Brian”

The Answer:

 

Dear Brian,

Both options you mentioned are possible. The Chapter 13 bankruptcy could strip down part of the mortgage if you have a second mortgage.

Your should definitely go and talk to a local bankruptcy attorney you like, face-to-face about your situation. Ask questions, get informed about what bankruptcy would mean for you.

Another option worth considering is to realize that you have been dealt an unexpected hand. Rather than try to bargain your way into keeping what you have, why not consider a true fresh start.

By giving up your house and renting something else local you can afford, followed with bankruptcy, it is the fastest way for you to reboot your life, get in shape to afford to pay for school and get back on track. It is a huge change in your life but it is also one way to get everything readjusted to where it needs to be.

If you go the Chapter 13 approach you are not going to be able to have enough extra cash to save each month to prepare for your future responsibilities? Doubtful. All I ask you to consider is that maybe the time has come for more drastic action, like a Chapter 7 bankruptcy, in order to achieve a more drastic, and beneficial result.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

Our House is Worth Less Than Half of What it Was and Our Income is Down 30%. Brian short sale reduce my mortgage ask the get out of debt expert
@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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  • Nona

    I too am wondering how good Louis Colley is doing regarding the Allegro disaster. I had sent written notice to Allagro at the (suspicious) Wall St., NY address ,via certified mail, to cancel my contract for debt settlement program. I had stopped pymt on EFT from my checking acct for Sept. Cost me $30 and only good for one time. Then I get a letter from “Allegro” stating they received my request to delay Sept payment and WHEN they resubmit the EFT it would cost me $30 service charge and that Oct pymt go as scheduled! Basically they ignored my request to cancel. The confirmation card came back, signed in a timely manner. Their letter to me had a letter head from the Alabama office, which I thought had been shut down. ???? I’ve had my doubts that Allegro exists @ 223 Wall St., #177, Huntington, NY and I recently read on internet that it does not. I also sent Louis Colley the letter to cancel contract. I’ve asked him to reply to some questions but he does not respond. I know he’s busy with all this but come on……I’m so confused with all this and can’t find answers. Hope you can help me: who is actually doing the EFT’s, Allegro or Colley? If it’s Colley, how is it I get letter from Allegro? How can it be Allegro when they were shut down? Who or what is at the Wall St. Address? Could this be Americorp? What more do I have to do to get these bastards to leave my checking acct alone? I cannot afford all of these xtra fees! Today after work I am forced to close my checking acct. I will open acct @ different bank. I wouldn’t think they could find it or withdraw on a different acct. Can they? 3 of the 6 creditors in program have gone to debt collection and they will soon be sueing me. I filed Ch. 7 seven years ago. Hope to meet with attorney soon to discuss Ch. 13. Hopefully I’ll be able to afford the pymts to creditors. Any info you can find to answer my questions will be appreciated from the bottom of my heart! I would to be able to stop crying all the time and to be able to sleep @ night!

    • http://GetOutOfDebt.org Steve Rhode

      Nona,

      Americorp is the NY address. They still service Allegro Law clients for Colley who is the receiver.

      Communication in this entire process is horrible. It is unacceptable. People are just being harmed differently after the take over of Allegro Law by the state of Alabama.

      The EFTs are actually initiated by Americorp under the guidance of Louis Colley, the court appointed receiver.

      The best option is to ask your bank to change your checking account number since you can’t be confident that any request to stop EFTs from the Americorp or Colley side are being honored.

      If you want to try and make this situation better, please file a complaint with the Alabama Attorney General about how you are being treated.

      Big Hug.

      Steve

  • http://www.ohdebtcounsel.com Jeff Jackson

    Brian,

    You have come to the right person when you contacted Steve. One thing I would add, if this applies to you, is NOT to draw on gualified retirement funds. These funds are part of your future and are protected from creditors and bankruptcy.

    Best of Luck

    Jeff

    • http://GetOutOfDebt.org Steve Rhode

      Jeff,

      Thanks for such important advice about the retirement funds.

      Steve

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