I owe 237,000 for a property worth ~70,000. Balloon due in 2 months – looking at foreclosure.
Two of my “friends” approached me, and the three of us purchased a piece of property in the fort Walton Florida for 270,000 total & took out a 3-year balloon. I am current, but I know we can’t pay the balloon and am considering foreclosure – deed in lue of foreclosure, bankruptcy -- something.
I am the “owner” of the loan, although all three of us are mentioned in the papers as being on the “mortgage” –the bank considers me the borrower. Properties in that community are not selling, and would likely bring 50,000-70,0000 if auctioned. The two partners can’t pay their 1/3 of the mortgage when it is due. (They are in financial trouble)
1. What are the changes of the bank actually seeking a deficiency judgment and winning? How long do they have to issue a deficiency judgment against me?
2. What is my personal liability? (garnish wages, 401K etc), liquidate my other bank accounts, put a lean on my house & seek the equity in my house if I have to foreclose?
3. I live in Ga. but the land is in Fl. I know state laws are different, should I try to do it in Ga. Or Fl? Assuming I get a lawyer, should I get one in Florida or Ga.

Hello snake:

1. The chances are excellent. I don't know how long it takes for an actual judgment to be issued.

2. Personal liability?? Yeah, you'll have a judgment against you for about $150K. Yes, they'll garnish wages, attach your 401K, attach your bank accounts and put a lien on your house. No, they can't make you sell it. But, IF you do, they'll get theirs.

3. Should you try to DO WHAT? I think you need a bankruptcy attorney and it doesn't matter if he's from Ga. Or Fl. Because bankruptcy is a federal issue.

excon

PS> Yes, you can sue your partners for their share.

Hey there snakeman--

excon gave you the straight poop on your legal and financial situation.

Your story is a cautionary tale for those who aspire to get rich quick flipping real estate. There are a lot of people in your situation right now. Maybe you could write a bestselling book or screenplay to pay off that $150K. Shakespeare made a career of telling cautionary tales.

I am the “owner” of the loan, although all three of us are mentioned in the papers as being on the “mortgage” –the bank considers me the borrower.
How in the hell did this happen? You needed better legal advice than you apparently had in the beginning.

PS> Yes, you can sue your partners for their share.
If you really do end up with a judgment against you alone, it would be prudent to do this and get an enforceable judgment against them, even if they don't have any assets. Even a turnip could win the lottery or collect an insurance settlement from an accident. Your bankruptcy attorney can advise you about this.

Well what about selling the property though a real estate agent, and trying to sell it for close to what you owe on it, and then just paying the balance out of your own pockets.

1. yes of course they will get a foreclosure in a heart beat but they will drag it out 3 to 5 months so they can add on a lot of late fees and legal fees. If you owe the money and don't pay, there is no way to stop the foreclosure

2. unless you set up a corporation or llc to buy this property, yes you are personally liable

3. sorry excon but it does matter where you file. If you just want to hire an attorney to represent you in the foreclosure you hire one in the court where they bring the foreclosure against you

BUT for bankruptcy you have to file in the state you live. Under the new laws there is a rule you can only file in the state you live and have to have lived there for 6 months. This is because while bankruptcy is done in federal court, the laws that apply are state exemptions and they vary from state to state. So what you can keep in one state varys from state to state.

So you wll have to include all ofyour debts in the bankruptcy