A New Start

[casten]

Maybe I am too late on discovering this website. To tell you of my last 2 years would take all day. To sum it up in Reader's Digest form, here goes.

Way back in 2006 when the market was still "ok", my husband and I did a re-fi on our half-million dollar house and paid off all our credit card debts and vehicles and actually had left over for a cash out. Our home appraised for $531,000 and we used every penny of it. At that time I quit my career of 15 years to start up my own business. My husband had a promising new job with a 6k a year figure. Abuse of alcohol worked it's way into our lives and the persuit of divorce was on. My husband lost his job and life continued to spiral out of control. By October of 2006, the judge ordered him out of the home for the safety of our two little girls. I used all of the "cash out" from the re-fi to continuing paying the bills until it was exhausted in December 2006. With no income or child support from my husband, we both started using our credit cards to survive and pay $60,000 in attorney fees. The house went into foreclosure and I got an apartment. A short sale was not at all an option with the 2nd mortgage. The home did finally sell for only $400,000 and the 2nd said we were obligated to pay the difference up to what we had left owing, approximately $92,000. At my divorce trial the judge ordered that to be split down the middle, half I would owe and half my husband would owe. My husband died 2 days before the judgement of divorce was to be signed. The case was thrown out of court and I assume all debt between us. That is $72,000 in credit cards and $92,000 on the second mortgage. They are completely unworkable! Having been forced to shut down my small business, I am now an unemployed, stay at home mother on social security. I cannot get a job cause I cannot afford childcare. I have no family in town to assist me either. Social Security is only covering my bills and not leaving anything for living expenses. I do not want to file bankruptcy as I did that in my first marraige and it took me 10 years to regain anyone's trust or credit. I am now down to selling everything I own and think I will be able to cover the credit card debt. Is there something I am missing that might be able to get the 2nd to forgive the loan.

Thanks for reading and any help will be gladly accepted!

Welcome to the forum and thank you for joining....

The second I am sorry to say will not forgive the loan, they are not forgiving principle balances on the mortgages today. Given that you are so stressed and just living day to day...your situation is not pleasant given the circumstances I would suggest that you consider consulting with CCC's and determine if they can negotiate the payments on all of the debt into a manageable format. This is like BK, but not the hit on your credit that a BK is. Short of that, you are unfortunately facing BK or having an attorney determine if there is another method that will alleviate the monthly trauma, given the post, I really doubt that there is any other alternative than trying CCC's or a BK. I realize that the onus of a BK affects your credit, however with the recent foreclosure, that is just as bad as a BK and frankly it makes sense to run them together....from the credit side of the world, lender here.

We have only seen the Seconds forgive and extend forgiveness in negotiated Short Sales to date...and that is limited as it is rare that you will obtain complete forgiveness even in those negotiations.