Can I keep my house?

January 7th, 2010 by Questions

We recently obtained a new mortgage on our home in June 09 but because of plummeting real estate values, the lender refused to include our debt consolidation with the mortgage as originally planned. Not enough equity in the house. We lost more than $25,000 in equity in just 6 months, and it has nothing to do with the condition of the property. As a result, we are now stuck with this loan at an insane interest rate and we cannot sustain the payments without everything else falling behind as is the case now. The loan is secured to the house. I am a little confused by the rules for our situation. Our home was appraised at $150,000 in June 09 and more recently at $160,000 (Dec 09). Mortgage is $105,000 and is paid to date, and the secured loan balance just under $23,000 and is 1/2 payment behind. Credit Card debt amount to about $5,000. If I file for bankruptcy, is there a way to keep my house? If not, do we have any other options available to us that allow us to keep the house? We have tried to explain ou The loan is secured to the house. I am a little confused by the rules for our situation. Our home was appraised at $150,000 in June 09 and more recently at $160,000 (Dec 09). Mortgage is $105,000 and is paid to date, and the secured loan balance just under $23,000 and is 1/2 payment behind. Credit Card debt amount to about $5,000. If I file for bankruptcy, is there a way to keep my house? If not, do we have any other options available to us that allow us to keep the house? We have tried to explain our situation to the `financial services` company, aka loan sharks but they have refused to re-negotiate our agreement in an effort to save our home. Any ideas or do we have to just suck it up and continue to sink further in debt until real estate values return to `normal`?

Posted from: Ontario

Questions

One Response to “Can I keep my house?”



, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

Here is how I see things, ultimately you have a house that is worth approximately $160,000. You also have $128,000 of loans (mortgage and secured loan) registered against the house. Outside of this you have a nominal amount of unsecured debt. The real problem you are facing is that the cost of your mortgage and secured loan is significant and you can’t afford to keep up the payments on both.

In a sitaution like this the only realy options you have, assuming you want to stay in the house, is to either continue paying things as they are, negotiate with the secured lender to alter the terms (and it sounds like you have done this) or try and find another lender that would be willing to lend you enough money topay off the secured loan by itself (often referred to as take out financing).

In a situation like the the filing of a bankruptcy or a proposal really doesn’t benefit you directly as those options are designed to deal with unsecured debts and don’t compromise secured debts unless you allow the property to be forclosed on.

If this is infact the case a bankruptcy really

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