What is the best course of action?

iVillage Member
Registered: 03-30-2003
What is the best course of action?
9
Thu, 07-26-2007 - 9:27am

I have gotten myself into quite the financial mess. To make a long story short, a second condo I owned (not the one I own and am living in) was forclosed upon. I just received a letter saying it was sold at auction. Should I consult an attorney? My gut tells me yes, but I am not sure where to turn. I feel like my best course of action might be to file bankruptcy, but I am not sure. I also have an automobile that was repossessed last year. I received a cancellation of debt from the IRS. I'm not sure that will be the last of it even though I have not received any notices from the bank attempting to collect any money from it (it was written off as "bad debt" on my credit report).

The good news is that all other bills are current. What should I do? Any advice is appreciated as my head is spinning and I'm not sure how to proceed. Thank you!

Community Leader
Registered: 03-17-2003
Thu, 07-26-2007 - 10:28am
Hi hope2bhappy.
iVillage Member
Registered: 03-30-2003
Thu, 07-26-2007 - 12:14pm

Carolyn, thank you so much for your thoughtful reply. I am going to make an appointment for a consultation with a bankruptcy attorney today and have them review my finances before I do anything. I just have a few more questions:

Do they have to review my budget, or would I have to present it in court? You are right, I am probably more than $500 in the hole every month, because I did not count in the expenses you mentioned which are very real.

Would I still have to pay real estate taxes and back condo fees on the forclosed upon condo? (I believe they were paid by the bank so they could clear the title and sell it), or would these be rolled into the amount I owe the bank?

Thanks. Your reply has really helped calm my nerves!

Community Leader
Registered: 03-17-2003
Thu, 07-26-2007 - 1:10pm
All those fees and debts would be included in your bankruptcy.
iVillage Member
Registered: 03-30-2003
Thu, 07-26-2007 - 5:23pm

My bf feels my filing for bankruptcy would be a big mistake. He said that it isn't as easy to walk away as it used to be and that the amount included in the bankruptcy is counted as income and you have to pay taxes on it. Is that true? (I live in MA if that helps.)

The latest is that I got another call from an attorney's office saying that the bank I had the auto loan with (the one that was repoed), is looking for $11K and that I should be receiving a letter from them soon as it was sent already. The lady on the phone said they could garnish my wages and put a lien on my home. Is that true? I am still going to do a consultation with the attorney, I'm just really nervous about it; there are a lot of emotions going along with it.

Then there's the condo that was foreclosed on. I'm sure that will be rearing its ugly head soon as well. What a mess. I am just thankful I am able to deal with it in a more head-on way than I was. Thank you so much for your valuable input.

Community Leader
Registered: 03-17-2003
Thu, 07-26-2007 - 6:36pm
There are a lot of myths about bankruptcy and a couple of myths are in your post.

iVillage Member
Registered: 03-30-2003
Thu, 07-26-2007 - 9:17pm
Carolyn, thank you again. I did get three names and numbers of attorneys who specialize in bankruptcy who I am going to call and schedule consults in the AM. Just one last question. What will happen with the equity in my condo? I put down about $30K on this place when I bought it and it has gained about $100K in equity. Thanks for answering if you know the answer to this question. I promise this will be my last!
Community Leader
Registered: 03-17-2003
Thu, 07-26-2007 - 10:01pm
You are permitted to have equity in your home.
iVillage Member
Registered: 03-30-2003
Fri, 07-27-2007 - 9:52am
Carolyn, thank you again. I have an appointment set up with an attorney for Monday AM, so I should have some more answers then. I am in the process of setting up at least one other consultation. I am starting to feel a little better already. I can't tell you how much I appreciate your insight! Hope you have a great weekend!
iVillage Member
Registered: 03-30-2003
Sat, 07-28-2007 - 11:59am
Hi Carolyn, here's a quick update. I spoke with two attorneys yesterday over the phone. Both of them told me I don't qualify for Ch. 7 because my income is too high. As a single person you are only allowed $51K or so. I do, however, qualify for Ch. 13 which is what I am trying to find a bit more about without obsessing, LOL. I was able to pull an information sheet from the attorney with whom I am meeting on Monday so I will at least be able to gather the needed info before meeting with him. I am also in the process of finding out whether or not I have a homestead on my condo (the one I am living in). If I don't, the attorney told me I could add one after the fact, and that would protect the condo from liens, etc. I checked the mail yesterday and I still have not received the attorney's letter about the $11K on the vehicle. Regarding the $8K credit card bill, they are willing to settle for .40 on the dollar, so the bill comes out too $3200 or so. I think I am going to accept my father's offer to pay that so that will be settled before I file, which I am more and more convinced is the appropriate action for me to take at this time to put this all behind me. Hope you're enjoying your weekend!