Free Ebook.

Enter your email address:

Delivered by FeedBurner

« Is It Ok to Lie About Your Salary in a Job Interview? | Main | Save Money by Asking for a Discount and Paying in Cash »

November 01, 2007


Feed You can follow this conversation by subscribing to the comment feed for this post.

I'm working hard to avoid both of these (currently 2 jobs plus starting a business), but if I had to choose it would be Bankruptcy. Our problem is not a house we can't afford, it's too much consumer debt.

I personally can't comment on foreclosure, but the effects of bankruptcy tend to linger a very long time - personally, professionally and emotionally. Ours happened 8+ years ago and of course, it is still reflected on our credit report. It was extremely embarrasing when we went to purchase our daughter a car and it was brought out in the negotiations with her sitting beside us. We had never discussed this with her - she was only 8 at the time of the bankruptcy. It was not something that concerned her and she didn't need to be concerned about her parents financial stability. I have missed out on job opportunities due to this also - having been upfront and honest with the potential employer. My best advice - work as hard as you can to do whatever you can to prevent declaring bankruptcy.

If you can afford the house by all means keep it and eliminate unsecured debt through bankruptcy. If you can't, then both unless you want a tax bill for the forgiven debt. Both will make life difficult, but probably not any more so than they are already facing.

My gut instinct is foreclosure, whilst first making sure that I had somewhere else to live of course.

This probably sounds crazy, but I would choose bankruptcy in the pinch especially if one of the reasons I was in foreclosure was because I could not afford the combination of my mortgage and other debts.

From what I understand, in Chapter 7, you can keep your house if the equity on your home is exempt (you do not have anything leftover after selling the house, paying the costs, and a varying by region personal exemption), and you can continue making payments. In that case, I would consider slashing all my other debt away and keeping the house. Sure it murders your credit, but other than that it is a win. If I had too much equity, I would consider Chapter 13 instead which I believe always allows you to keep your house (again as long as you can afford the mortgage only).

Well options like short sale or deed-in-lieu are the most sought after by borrowers when it comes to getting out of the mortgage mess. But at times, an even better option could be Chapter 13 bankruptcy which allows one to restructure debts and start again!



If you get 3 jobs, work yourself to death, borrow money from relatives, and give every penny you earn to your mortgage payment (Remember for 30 YEARS!), your doing exactly what the Mortgage companies want! And your wasting you and your relatives money. The mortgage companies have been making out big for years, and now they're getting help from the government. And that is exactly why our economy is the way it is! Nobody can afford anything because of their mortgage payments! Just so you know you can still buy a house 2 years after you file for bankruptcy.

This doesn't really address the dilemna that we (and I imagine so many others) are really in. My husband lost his management position of 18 years in Feb 2009. He was an engineer, but took the management position so he could be a parent to his children, since his previous wife was not there most of the time. Not great paying but he was able to be home for the kids. They are now raised, but being out of the engineering field for that many years hurt his chances of finding work as an engineer.

Now more than 2 1/2 years later, he still has not been able to secure a job (Living in So California) He has built and lived in our home for 14 years, the mortgage is a bit less than what the house is worth, but we cannot make the payments anymore. This is after going through all our savings (rainy day fund) plus our complete 401K retirement funds. My husband is 60, I am 55. I work full time as well as am starting my own bookkeeping business to try to make extra money. We do have some unsecured debt as well.

My husband has worked tirelessly every day since he was laid off, to try to find employment or start his own businesses. He now is starting to earn small commissions on a digital marketing business, but we still are two months behind on the mortgage and the commissions are only $500 so far.

We want to keep our home, espec since at this age, we can't really start over, but is it right to keep pouring everything into our home at the expense of our future? Not only that, to short sale or foreclose on our home would mean we would need to pay rent on an apartment, which would cost almost as much as our house payment. My poor husband has done absolutely everything he could, but still we are watching our retirement and home going down the drain.

Trying to refinance didn't work because they could only use my income, not sure where else to turn to. Any ideas?

Brenda --

I'll post this as a "help a reader" piece later in October. Watch the site and see what the readers suggest.

Thanks, I will be watching for it. I am afraid later in October could be too late to help us save our home but hopefully will help others in our position.

The comments to this entry are closed.

Start a Blog


  • Any information shared on Free Money Finance does not constitute financial advice. The Website is intended to provide general information only and does not attempt to give you advice that relates to your specific circumstances. You are advised to discuss your specific requirements with an independent financial adviser. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. All posts are © 2005-2012, Free Money Finance.