Bankruptcy

"Am I Going to Lose My House?" Only If You're Smart.

By Joseph McDaniel, Esq.

Now, let's think about this for a minute: if you are paying four thousand a month for a house, and you can rent a better house for $1,000 a month, is keeping the house a good idea?

I frequently get to talk to very, very smart people who have been hypnotized in one way or another.

If you tried to SELL them a house worth $400,000 for a price of $800,000, they'd laugh at you.

But the same people, once IN the house, desperately want to stay in THAT same house, regardless of the negative equity.

Is that a good idea?

Well, it depends on their projected retirement date. If they want to retire in 2029, it MIGHT be a bad idea.

If they want to retire in 3029, NO PROBLEM!

p.s. it's absolutely true that in some cases, a Chapter 13 will permit a stripdown of the second or third liens. Maybe. Someday. And you're trapped in a Chapter 13 for three to five years for that privilege. My prejudice is simple. If you qualify for a Chapter 7, scrape off all your debt. Reestablish your credit. Buy a house that has a little equity already. End of story.

Doesn't mean my prejudice has to control you. But I do hate to see people pay TONS more than they have to for years.

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on September 01, 2009 (boomark / email).