By Sherry F. Ellis, P.A.
August 2013
Many people are unable to make their mortgage payments these days to no fault of their own. Some are experiencing a loss of job, loss of health or loss of spouse due to death or divorce. Other folks are experiencing higher mortgage rates, higher property taxes, and increase in homeowner association dues.
There is little sense in having people without a home and a home without their owner and someone to take care of it. What can you do? Please read the following options:
1. Contact your lender and ask for the work out department. They will probably tell you that you have to be in default two-three months before they start to negotiate. Consult with a Bankruptcy Attorney.
2. Visit the following web sites: www.ellisbankruptcy.com, www.scgov.net/homehelp
3. If served a summons call me immediately (Sarasota: (941) 363-0800, Venice: (941) 488-4889) because usually you have 20 days to answer the Summons. What this does is buy you time to make a decision and see what options you have available. Everyone wants a time this will happen and it varies from months to years.
4. What if you can pay the first mortgage but not the second or home equity line? Bankruptcy Court is now stripping junior liens on homes in Chapter 13 cases if the First Lien holder’s Mortgage is equal to or greater than the present value of the home. So if the present value of your home is $90,000.00 and your First Mortgage is 100,000, the Second Mortgage or Home equity Line is unsecured as are the other liens on down the line.
5. We are modifying First Mortgages in Chapter 7’s and Chapter 13’s in Bankruptcy Court that qualify.

Here is a list of things you should think twice about

1. 1. Dipping into your retirement funds.
2. Exhausting Life Insurance policies and annuities.
3. Liquidating assets including savings accounts, stocks, bonds, CD’s, etc.
4. Dipping into protected college education funds.
5. When you begin to take cash advances or do balance transfers to make ends meet this is an indication it is time to seek professional advice. Robbing Peter to pay Paul is a slippery slope.

Some of the things you want to consider in deciding whether or not to keep your home are

• Where do I want to be in 2 years, 5 years, and 10 years? What is the condition of my home?
• Is my mortgage fixed or adjustable? If adjustable when will it adjust and how much?
• Is my home in a desirable neighborhood that will prosper with time?
• How does my home compare to others in the neighborhood?
• Where will my children be in 2 years, 5 years or 10 years?
• What are the property taxes on my home? Will they increase?
• If I fall behind in payments, will I be able to catch up in a month or two?
• Ask yourself how secure your job is, how secure is your spouses job?
• Do you have affordable health insurance? Is this available with a job loss?

Most people today are in homes that have little or no equity. By answering a summons the person can stay in the home for quite a while weighing all options and also save up for first months rent, last months rent and security deposit. Turning on utilities at a new location is expensive. Moving is expensive. This time allows you the opportunity to take care of the home, plan ahead and save money. In the interim it is possible a short sale may come to fruition, the market may pick up, you may find another job, etc. Time is valuable. Many people as if it is hard to rent a place with bad credit or a Bankruptcy. One option is to save as much money as possible to rent and sign the lease if possible before filing a Bankruptcy. Your fresh start will assist in paying the rent.