We Have Three Mortgages Against Our House, Started Our Own Business, and Finding it Hard to Pay the Bills. – Arthur

I apologize in advance for the short response. I am currently away on vacation with limited internet but wanted to give you an answer as soon as possible. Steve


“Dear Steve,

Upside down mortgage due to declining property values. Our income is down 50% due to the economy. We’ve tapped all our equity to try and hang in there, and now have three mortgages on the house. I’m 56 years old, so I’m not the most desireable candidate to companies that are hiring in my fields of exoertise.

Regardless of the law, age discrimination occurs. Out of desperation, my wife and I invested in an opportunity to own/run a specialty gift shop inside a namebrand hotel, so we created our own job, tapped our remaining credit lines, and business is very bad. The shop is an excellent opportunity, but it looks like it will take too long to help us out of debt., or at least tread water until I can economically recover, professionally speaking.

How can we renegotiate our mortgage without an adequate income? How could we find someone that may be interested in owning the gift shop, unique situation – virtually no overhead, no rent, no utilities, no percentage to the hotel, so it is a good opportunity for someone. This is a business traveler hotel, not a resort or tourist destination, so their business levels stay pretty steady throughout the year.


Dear Arthur,

Your situation points out several interesting issues. The first is the mortgage modification. Your lender is under no requirement to modify your mortggage for any reason, if they don’t want to. There is no law that says that lenders must modify mortgages to make them affordable for people in trouble.

Bank lobbies and lenders are fighting a recent proposal that would allow bankruptcy judges to have the power and authority to allow the bankruptcy judges to modify the mortgages to keep them in their house.

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Your only legal intervention to adjust your repayments based upon what you can afford, only through bankruptcy. If your debts are all secured by the house then bankruptcy will only be of assistance once the home is foreclosed on and the lenders pursue you for the balance due from you for your mortgage defaults.

A business buyer could be out there and waiting but it is probably someone that is nearby the hotel. I seriously doubt that a buyer is going to come in with a large amount of cash to buy you out. A business buyer is going to look at sales and from what you’ve shared, sales are not stellar.

You might be able to find someone to purchase your inventory and maybe a little extra, but I seriously doubt it is going to be enough to pay off the debts associated with the potential, but currently not explosive, business.

Now, you might think that the future is hopeless, but it’s not. Once you can remedy this situation, through proactive intervention on your part, then you can put these debts behind you and move forward towards a new future.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Steve Rhode

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