Thank you for asking! I cannot give legal advice, but I would sell the house in a short sale at this time. This will minimize the bills at the present time and reduce the damage to the credit ratings in the future. I would be happy to stop by with more information or meet over a cup of coffee at your convenience. Please feel free to call for an appointment anytime. I can be reached at 818-718-8080.
Paul Marduk, Broker
In reality, this is a question for an attorney. If you would like a recommendation of a very good bankruptcy attorney in your area, contact me directly. They will be able to look at your situation and give you the legal answers you need to make an informed decision on how to proceed.
This is not legal advice, just general information about your current situation. As noted below, your home mortgage is a debt which is secured by your home. If you don't pay the mortgage the bank will take your home to satisfy the debt. Your credit cards are NOT secured by your home. If you don't pay your credit cards, the companies will call and harass you, but cannot take your home. Eventually, the credit card company may get around to suing you and filing a judgment lien against your home, but that could take years and most credit card companies don't like throwing good money after bad (in other words if you have not assets, home equity $0 and limited income they will eventually write off the debt). So ....... pay your mortgage if you can.
Meanwhile, contact your bank and start a loan modification process. This will keep them (and unfortunately you) busy for 3 to 9 months, as they gather information and make a determination of whether or not you are eligible for a modification. Then contact a good attorney/cpa/financial advisor and figure out how to deal with your other money problems. If all this fails, then list your home for short sale. This will allow you to remain in control of your life, keep the bank from foreclosing and kicking you out, and will probably buy you an additional 3-12 months in your home. Dare to Dream.
Shel-lee Davis, CDPE
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
Bankruptcy will cost you approx. $2K - $5k to file
ODDS for credit card company to sue very low in most circumstances IF so the courts would be tied up all day with credit cards suing card holders.
If you can't pay credit cards you might consider in months down the road settle the debt .
PS I owned a credit repair company for 10 years and consultant to many off these issues.
Remember, credit card debt is unsecured debt. They may be able to get a legal judgement against you but they can not attach your stuff and take it without a court order. if it was me I would pay for the house. I might consider talking to a bankruptcy attorney to find out all of my options.
Go check out their website, it is very informative, you might click on their tabs for Loan Modification or Short sale.