Home Selling in 91360>Question Details

cameronincam, Home Seller in Newbury Park, CA

Short sale or BK?

Asked by cameronincam, Newbury Park, CA Fri Nov 2, 2012

Wow, where to begin.

Income is not a problem, spending is. (Which I am now watching like a hawk) I've accumulated $40K in credit card debt. My home is worth $460K and my 1st is $405K and I have a $104K Second (total $509K) So without deducting closing costs, I'm $50K short.

I am hoping to get married next Oct. Have minimal savings $10K but take home is around $7K per month. Mortgage is $2,150 $450 second and a large portion of the rest goes to credit card service and living expenses. I've never missed a payment on anything and my credit is in the high 470's.

When we get married, we want to buy a home together. We can live in my fiancee's house for a year or so after we get married, but we really want to move with her and her kids to a different home within a year of marriage (Oct 2014 house buy)

Is a short sale the best option or a full on BK to discharge all the debt? I take full responsibility and feel obligated to pay back, but the house is the sticking point.

Help the community by answering this question:



I highly recommend talking with an attorney as well as your CPA for a matter like this. I work closely with a BK attorney for shortsale clients. The initial consultation is free with no obligation. He will give you a better perspective of your options. He will inform you so you can make a wise decision. I work with an attorney for matters like this so my clients get the best possible advice. Contact me, and I will forward the attorney's contact information.

Chris Chin
(805) 258-2870
1 vote Thank Flag Link Fri Nov 2, 2012
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0 votes Thank Flag Link Wed Nov 20, 2013
Why isnt a loan modification in the list of choices? Have you considered or tried that avenue? The issue really seems to lie in the credit card debt. What interest rates are you paying on those credit cards that is making it hard to keep up? Getting rid of the home is not the real solution. In a years time the value of the home may again exceed the mortgage owed. Then you will be in a good spot. Then you may be seeking advice to refinance, pull money out and pay off the majority of your debts. all of this without the damage to your credit. Think about it more. Thats all.
0 votes Thank Flag Link Sat Oct 19, 2013
What i would do is stop paying the second and any 'unsecured credit' the second will not foreclose if the total value of the home does not exceed the first mortgage.

File BK, you can live without a good credit score; Credit Card / debit card is easily obtained. In as little as 3 years you could apply for a new mortgage. Note, the Bk should stop the second from any deficiency recourse it might try later down the road.

This is my opinion only seek out a professional BK attorney and a cpa.
0 votes Thank Flag Link Fri Oct 18, 2013
Every situation is different. The best thing to do is meet with an agent like myself who can go over all the different options then you can figure out what's best for you and your family.
Please call me at 805-630-3323 so I can get started and help you make a decision.
Mary Fealkoff
0 votes Thank Flag Link Tue Nov 6, 2012
Hum, I rather curious how it's possible to have a credit score in the "high 470's" (You're really squeezing every drop out of it.) if you've never missed a payment. You should check your credit reports for any errors or other irregularities.

Otherwise, with your current credit score, I don't see any material difference between a short sale or BK for you. You can verify with a credit counselor on that. Here's my take. With a short sale, you may be able to recover and be able to qualify for a mortgage in 5 years. With a BK, you're out of luck for at least 7 years. So, with your current life plans, both would be poor options.

Realistically, your best bet is to continue to stay current on your payments and hope the current housing rebound lifts you out of trouble in another year or so.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Sun Nov 4, 2012
You really need to speak to a credit specialist and/or mortgage broker to see how a short sale will affect your credit versus a bankruptcy. Both can keep you from obtaining financing for several years. Also, you would have to contact your mortgage company to see if they would cooperate with a short sale, some do not.
0 votes Thank Flag Link Fri Nov 2, 2012
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