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breezmom · Feb 23, 2007, 06:41 AM

I have about 40,000 in unsecured debt, I own my house with no mortgage. I built this debt up after my husband abandoned us and our children and then I found out I had received a sexually transmitted disease from my husband, this sent me into a depression and I was unable to work for quite a while.
Now I have left the state to get away from all that, and settled in a small home in another state. I do own this house without a mortgage, and I own it on my own.
I cannot pay my creditors, and I cannot file bankruptcy because of my home I cannot file chapter 7, and because I am not working I cannot afford chapter 13. What I need to know is there anyway a creditor can force me to sell my home, or can they just place a lien?
I am so petrified, that my daughter and I will be homeless.

LisaB4657 · Feb 23, 2007, 06:45 AM

No, they can't take your home. They can sue you and obtain a judgment against you. That judgment then becomes a lien and it must be paid when you either sell or finance your home. Also, they can attach your bank account and, once you start working they can garnish your salary. But they can't make you homeless.

excon · Feb 23, 2007, 06:49 AM

Hello breez:

UN-secured means exactly that. IF they get a judgment against you, they can place a lien on your home, which means that you'll have to satisfy it WHEN you sell - NOT BEFORE.

Plus, they can attach your bank accounts and garnish your wages.

excon

ScottGem · Feb 23, 2007, 06:52 AM

In most areas, they can't even put a lien on a primary residence for unsecured debt. But the most they can do is place a lien that would need to be satisfied before sale. But, if you own the home free and clear that indicates you either had money to purchase it or you have equity in it that you can borrow against. I would seriously look into an equity loan.

breezmom · Feb 23, 2007, 07:33 AM

Originally Posted by ScottGem

In most areas, they can't even put a lien on a primary residence for unsecured debt. But the most they can do is place a lien that would need to be satisfied before sale. But, if you own the home free and clear that indicates you either had money to purchase it or you have equity in it that you can borrow against. I would seriously look into an equity loan.

I would love to get a equity loan to pay it off, but because the credit report is so bad they will not give me a loan. I have tried. Any suggestions? I did have money to purchase it, as I sold my home in another state and used the proceeds to purchase this house, this was prior to the creditors coming after me aggressively. So I was able to do that. I understand if they lien my house, I just worry about being homeless.
Thank you.

breezmom · Feb 23, 2007, 07:34 AM

Originally Posted by excon

Hello breez:

UN-secured means exactly that. IF they get a judgment against you, they can place a lien on your home, which means that you'll have to satisfy it WHEN you sell - NOT BEFORE.

Plus, they can attach your bank accounts and garnish your wages.

excon

Will they take everything from my bank account? Or can I leave a certain amount in there?

ScottGem · Feb 23, 2007, 07:36 AM

If they attach your account they will clean it out.

I can't believe that you can't get a mortgage or equity loan. While the interest rate may be higher due to your history, you are talking about a secured loan. There has to be a lender willing to underwrite the loan.

breezmom · Feb 23, 2007, 07:40 AM

Originally Posted by ScottGem

If they attach your account they will clean it out.

I can't believe that you can't get a mortgage or equity loan. While the interest rate may be higher due to your history, you are talking about a secured loan. There has to be a lender willing to underwrite the loan.

I agree, but I have checked with about 6 different companies, and denied each time.

excon · Feb 23, 2007, 07:58 AM

Hello again, breez:

Scott is absolutely correct. You CAN find an equity loan given that you own your property free and clear.

You need to look for an unconventional lender. You may only get a mortgage for up to half your home's value, and the interest will be high. But it will cover your debt. Plus, you'll convert NON tax deductible interest into deductible interest.

Look harder. Look in the RE loan section of your newspaper. Ask all those who denied you. Shop well... What you seek IS out there.

excon

landlord advocate · Feb 23, 2007, 08:14 AM

Originally Posted by breezmom

i have about 40,000 in unsecured debt, i own my house with no mortgage. i built this debt up after my husband abandoned us and our children and then I found out I had received a sexually transmitted disease from my husband, this sent me into a depression and I was unable to work for quite a while.
Now I have left the state to get away from all that, and settled in a small home in another state. i do own this house without a mortgage, and I own it on my own.
i cannot pay my creditors, and i cannot file bankruptcy because of my home i cannot file chapter 7, and because i am not working I cannot afford chapter 13. What i need to know is there anyway a creditor can force me to sell my home, or can they just place a lein?
I am so petrified, that my daughter and i will be homeless.

Banks are reluctant to give you a loan because you do not have a source of income and you are already $40,000 in debt. You are unemployed. First, look at all your credit cards. The higher the credit line, the lower it will make your score. If some of the available credit amounts are excessive, call and lower the available credit line. Call your creditors and negotiate a lower interest rate, consolidate the debt at a lower rate when possible.

Take a close look at your expenses and cut them as drastically as possible. Then get out the newspaper and find a job. You can not continue to live in a house, charge your living expenses to a credit card and not have an income. Eventually the credit card companies will close the accounts due to none payment. Then what? Before that happens, it is time to take charge of your life.

breezmom · Feb 23, 2007, 08:18 AM

Originally Posted by landlord advocate

Banks are reluctant to give you a loan because you do not have a source of income and you are already $40,000 in debt. You are unemployed. First, look at all your credit cards. The higher the credit line, the lower it will make your score. If some of the available credit amounts are excessive, call and lower the available credit line. Call your creditors and negotiate a lower interest rate, consolidate the debt at a lower rate when possible.

Take a close look at your expenses and cut them as drastically as possible. Then get out the newspaper and find a job. You can not continue to live in a house, charge your living expenses to a credit card and not have an income. Eventually the credit card companies will close the accounts due to none payment. Then what? Before that happens, it is time to take charge of your life.

Oh I am not using the cards, stopped over 6 months ago, I do support myself. I do no living on credit cards, that was when I was working but out of work due to different things. I just moved to another state and am currently working for work, have only been here about 4 weeks. I am not living off cards at all.

landlord advocate · Feb 23, 2007, 08:27 AM

Once you find employment, the banks may look at you differently. In the mean time, have you asked about a reverse mortgage? It may be just enough to tide you over until you can get your finances in order and start getting paychecks coming in.

breezmom · Feb 23, 2007, 08:31 AM

Originally Posted by landlord advocate

Once you find employment, the banks may look at you differently. In the mean time, have you asked about a reverse mortgage? It may be just enough to tide you over until you can get your finances in order and start getting paychecks coming in.

I have to be 62 for a reverse mortgage.

excon · Feb 23, 2007, 08:42 AM

Hello again, breez:

What does your house appraise for, and where is it?

excon

breezmom · Feb 23, 2007, 08:45 AM

Originally Posted by excon

Hello again, breez:

What does your house appraise for, and where is it?

excon

North Carolina about 115,000

ScottGem · Feb 23, 2007, 09:10 AM

In your original post you said; "I was unable to work for quite a while." I took that to mean that you were working now. If you aren't working that could explain the reluctance to give you even a secured loan, if there is no income. But if you have a job, its harder to understand.

breezmom · Feb 23, 2007, 09:13 AM

Originally Posted by ScottGem

In your original post you said; "I was unable to work for quite a while." I took that to mean that you were working now. If you aren't working that could explain the reluctance to give you even a secured loan, if there is no income. But if you have a job, its harder to understand.

I am currently looking for work. I left California where I did have a job. I am just settling in here, it should not take long to find a job. I currently have an income of child support, which pays the bills and feeds us.

excon · Feb 23, 2007, 09:20 AM

Hello again, breeze:

Nobody will loan you the money?? You called everywhere?? Ain't going to happen?? I know somebody down in your neck of the woods who does stuff…

Would you be willing to sell your house for, say $50,000, and enter into a lease with an option to buy the house back at the same price? You'll have to pay rent (whatever the going rate is for a house like that), plus payments on the option. They'd be high payments too. But when you've built, say, $15k in equity on your option, you could exercise your option to again purchase your house back, using the option as a down payment. Then you'll need to make payments on the remaining balance of $35k. They'd be high payments too.

The good news about an arrangement like this is you get your money, and you don't lose your house, that is IF you make your payments on time. The bad news is, if you miss one payment, then you're out in a month with nothing.

excon

breezmom · Feb 23, 2007, 09:37 AM

Originally Posted by excon

Hello again, breeze:

Nobody will loan you the money???? You called everywhere??? Ain't gonna happen???? I know somebody down in your neck of the woods who does stuff…

Would you be willing to sell your house for, say $50,000, and enter into a lease with an option to buy the house back at the same price? You'll have to pay rent (whatever the going rate is for a house like that), plus payments on the option. They'd be high payments too. But when you've built, say, $15k in equity on your option, you could exercise your option to again purchase your house back, using the option as a down payment. Then you'll need to make payments on the remaining balance of $35k. They'd be high payments too.

The good news about an arrangement like this is you get your money, and you don't lose your house, that is IF you make your payments on time. The bad news is, if you miss one payment, then you're out in a month with nothing.

excon

I have tried about 6 places for loans. And no one will do it. I guess because I am unemployed.

No I would not do anything like that? What kind of benefit would that have for me? As yo have said I will not lose my house, so why would I do that? I know they will place a lien, but that's OK with me as long as I don't lose my house. I know when I sell it or refinance that lien would have to be paid.

excon · Feb 23, 2007, 10:04 AM

Hello again:

With $40k in judgments, that are surly headed your way, you won't have an income and you won't have bank accounts. What good is your house if you can't eat?

Plus, the interest continues to accrue (at credit card rates) while they wait for you to sell your house. You have equity of about $115,000 now. With a lien of $40k accruing interest, you won't have ANY equity in left in 7 - 10 years.

That's why you should consider something like this. Otherwise, it's a slow death.

excon

PS> (edited) And, I didn't even mention the legal fees that are going to be stacked up on you. They alone might wipe you out.