Help me Hive! (Financial Question)

[Just Me]

A good friend just called me. Her dh lost his job months ago, and the are very behind on their mortgage payments. They received foreclosure papers last week and a letter today saying that their court date is 2/22, and the sale is set for 3/14.

Do they have any options other than bankruptcy - which I don't think is really an option. Even if they declare bankruptcy, they can't afford the house.

Advice would be appreciated.

BTW - I know that they are both working now, but they aren't making what he used to. And I don't know how much they are behind on their payments.

[Claire]

I'm not a lawyer, but I'd say there's no hope for the house since it has gone this far. I believe that, if the house doesn't sell and clear at least the amount of their mortgage, that they are liable for the difference. They don't necessarily have to declare bankruptcy if they can pay their debts. I don't know how useful bankruptcy is these days. Before the laws changed, it could really help people start out fresh but I think now there are still certain types of debt you have to pay off after declaring.

Once you get behind on mortgage payments, every month it becomes *more* difficult to get caught up. This is because the fines and accummulated interest can make the payback amount astronomical pretty quickly. Plus, many banks will insist on having all back payments and all fines and interests paid before they will even talk to you. Anyone with the kind of problem they had should call the bank *before* they miss a payment and see if they can work out a plan together. Most banks will talk to you as long as you are still in good standing on your mortgage. Most won't talk to you after you've missed a couple of payments.

Just my lay info.......

[Jean in Newcastle]

I would still try and call the bank. It won't hurt to try (though if they rebuff them it might be upsetting). Also - call a credit counseling service (the free kind).

[Just Me]

this is what I was thinking about this, but wanted to pursue all options before getting back to her. Please be praying for this family.

[Claire]

I did some Googling and came up with this website (http://ushomesavers.com/) (and others that are similar). It looks as if all they could do at this point would be to hire an attorney to represent them and see if they can get the foreclosure postponed while they regroup. Attorneys are costly, though, and there is no guarantee of outcome.

Also, here is a Wikipedia article on foreclosure (http://en.wikipedia.org/wiki/Foreclosure) and various aspects of it.

Again, in my lay opinion, it's probably too late to do anything worthwhile about the house. Foreclosure is different from bankruptcy. Filing bankruptcy would be an action they would initiate themselves. Their best bet is probably to find a good attorney right now who will explain their options to them.