My question is regarding avoiding foreclosure but the nature of my circumstance is rather unusual.
Let me start by explaining that I just recently learned that my life partner of 20 years was over a year behind on our mortgage payments when, about 2 months ago I answered the door to a foreclosure notice from the bank.
There are 2 properties involved: our main home and a guest home next door that he bought for cash back in 2003. I also learned that he had secured a 2nd mortgage in 2008 to finance a business venture (which failed) and in doing so he combined the guest house into the package.
Prior to this, sometime around 2007 he put the guest home into the name of a trust and listed me as a trustee (he was acting manager I believe and not a trustee) I think he also made it a homestead.
Fast forward to present time when we received the foreclosure notice .. he’d been getting quite ill, much more so than anyone knew including myself and it was apparently affecting his thinking.
Not feeling well enough to deal with everything, we went to a local atty. and gave them a 2K retainer to deal with the courts in answering the foreclosure and to work with the bank for a re-fi. This was just last month. Days after our first consultation I had to rush him to the hospital where he was diagnosed with stage IV lung & bone cancer and last week he passed away.
I’m doing my best to unravel the paper trial of what he did but it’s quite confusing. I know so little of these things and he always handled the finances. In his will he left both homes and everything in them to me, which may have been an advantage when the will was drawn but today, it means a 600K debt on 2 homes that are severely under water and that is way beyond my means.
Even so, I want desperately to save them. We’ve been here for 20 yrs, had custom remodeled the main home in 2000 not to mention all the memories. I’ve been able to rent out the guest home and, if I can somehow get reduced financing, rental income from the guest house could very possibly pay the mortgage(s). The problem as I see it, is that my personal debt:income ratio looks bleak.
The income we had from his business was taken over by his daughter, who was named executor of the will, so that is lost. I don’t feel I can risk throwing more money at an atty for fear that nothing would come of it. I had to put the attys we hired on hold to stop the financial bleeding.
So here I am, 62 years of age, still grieving the loss of my loved one and scared to death of facing an eviction. I have no experience in these matters which is making me feel overwhelmed.
I realize this is a complicated situation but I’d like to know if I have any chance of saving our home, perhaps through one of the MHA programs or something else? I’m sure there is more info you may need and I’m happy to answer any questions that might help you in making suggestions. Thanks so much for your time. –
First off let me say how sorry I am for the loss of your life partner so suddenly. Dealing with the loss of a loved one is tough enough but to pile the other mess on top, I’m sure the stress must be huge.
As an outsider in this situation I can offer you some practical advice based on experience.
The math doesn’t lie. Unless you have the income to support both of the homes, your regular expenses, and still save money each month, then saving the homes may be beyond our grasp.
However, not all is lost. Again, it depends on your income, but it might be possible to save your primary home. This depends on what state you live in. But the logical way to do this would be by filing a chapter 13 bankruptcy. You can click here to find a local bankruptcy attorney and discuss the issue with them.
There is no way to diminish make the pain of the loss of your partner and the possible pain of the loss of one or both homes. Those situations are what they are what they are. But what you can do is do your best to get actively involved in finding a solution for the situation and acting proactively. As long as you are acting proactively you will always be reacting and never driving the bus, if you know what I mean.
I’d like for you to read How to Get Out of Debt. The Honest and Unvarnished Truth. It will give you a broader perspective and help clarify some of the uncertainty you are dealing with.
The goal at this point is to find the bridge from your old financial life to your new financial life. We need to fit your new life within your current income and keep our eye on the fact you are creeping up on years when you may not be able to earn money.
One real possibility is for you to realize that you are currently living through a huge life transition. It might be appropriate to just wrap up all your old debt at this point in a chapter 7 bankruptcy and start a new financial life that will be less stress and leave room in your life to focus on finding a peaceful path forward towards better days.
Your homework: go meet with a bankruptcy attorney right now and then report back.
Please post your responses and follow-up messages to me on this in the comments section below.