Expert: Dick Dennis - 9/22/2005

Question
We own a home valued at $252,000.00. We are on our second term with a realtor but cannot even sell home for what we owe ($230,00.00). In Ohio we have only until middle of October to file before the new bankrupcty law takes effect. Problem is, my husband and I have never missed a payment with the home, its been 3 years since we paid off all our credit cards, we own none today. Our vechiles are paid off. We have excellent credit. BUT, we have been exhausting our savings down to about $200.00 left cause my husband's job is getting scarce. He has been looking for over 4 months but the jobs available pay $6.00 less then what he makes now. And sometimes he works 3 or 4 days a week cause of slow business. We make about $50,000.00 a year . But if this continues we will miss a house payment for the first time in 5 years, and it will get worse. That right there will affect our credit and we know it. But here is our options: file bankrupcty now and wipe out our home and start new, which means bad credit. Or after the new law, we miss a couple of house payments, then loose it, credit goes bad and we end up having to pay back a large part of our home we no longer own.   We pay interest only on our house. Bank says: "Oh, well!"  Will the house sell this year?  If not, should we file bankrupcty before the new law goes into effect? PS. My husband and I are truly in love, so it won't matter where we live as long as we are together. Sign: "Sweethearts for Life"

Answer
It's starting.
Before everybody else gets into the same line you are, I would recommend you put an ad and anything else you can let the world know that you are willing to let someone take over your loan. Yes, I know the bank is not going to like it, but they don't have much choice from where I stand. As long as the next person has good credit and has no prospects of losing his job, I guarantee you the bank will accept that person. That will help you save your credit. In fact, you do not have to let the bank know that someone else is taking over. As long as the payments on the house is coming in, no one will bother you.

You are a typical good-credit person. A good-credit person sees what is going to happen and wants to make sure everyone is paid off properly. Those who don't care if they have good credit or not just let the payments fall behind and stay in the house for as long as they can for no rent.

If your Realtor is not willing to help you by selling the house for you for, say, a thousand or two as a flat fee, then I would recommend you cancel your listing and get to work letting the world know about what you are willing to sell the house for. Just maybe, the Realtor would be willing to lower the price down to a level where he/she would be willing to accept whatever fee is left.

I've been through this before—twice, Sylvia. The idea is to save your credit. You will be well rewarded the future if you do.

Also try this: Lease-option. Your Realtor is not going to like it, but your credit must be saved. The idea is to lease it to someone at a rate that would pay your obligations on the house (or whatever is acceptable to you if you can make up the balance). There are people out there who are looking for that opportunity to move into a house. But you really gotta make sure they have good (or almost good) credit, or they are going to drop the house into your lap and there goes your credit. A good Realtor would help you accomplish a lease option.

Or sign the house over to the Realtor and let him/her take care of it. You'll notice that I have made a couple suggestions where your Realtor should be able to help you. If your Realtor is not willing to help in any of these ways, you really have a bad agent.

If I was in Ohio (I'm in California), I know darn well I would have no trouble in helping to save your credit. I've been where you are and we have been married 51 years.

I do wish you well

Dick Dennis   dixiedee13@aol.com