I am currently going through a divorce, and have 3 small children.
I have been the primary (sole) earner in the household. We have no debt except the car and mortgage and my credit score is 793. The problem is that we are upside down on the mortgage, and can’t sell the house.
My husband can’t afford to take over on the mortgage, and I HAVE to move out of the house so that I can get help taking care of the kids. Obviously I will need to pay for living arrangements for myself and the kids, so to continue to pay on the mortgage as well is about impossible.
We live in the worst housing market in the country – there are 6 houses for sale/rent on my block alone. Selling/renting is realistically not an option. I’m also not sure how this affects the process but our mortgage was split into an 80/20 so we actually have the amount broken into two loans from two lenders. All of the payments are current. I don’t want to destroy my credit any more than necessary, but I don’t know what to do. I can’t continue to pay on this mortgage and I can’t continue to live in the house. He positively cannot make the payments. Help?
Your choices are limited and dramatic. It really isn’t your fault that the economy is in the toilet and that the real estate market is tanking, no more than rain when you are hoping for sun. That is just something that is happening that is coincidental to the moment of your divorce.
The worst thing to do right now would be to try to protect your credit score above taking the proper care of your three small children. They must come first.
My advice is that you find a new place you can live, move in there, stop paying the mortgage and wait for the home to be foreclosed on and then go bankrupt.
Your situation is a bit like the person with a flesh eating bacteria on their foot. Sometimes it is better to amputate the foot, as unfortunate as it is, so that the person can live.
In your case, for whatever reason, you need to make a break from your husband in a lousy economy with home prices plummeting. Bankruptcy to end that debt is probably the best surgical tool you can use to move forward into a new and better life with your children.
It is unfortunate but it is what it is.
I would urge you to go and speak with a local bankruptcy attorney now. Ask for a free bankruptcy consultation. It would be better to plan the timing of all of this in advance so you know exactly what the plan is to deal with this and the timeline for execution.