WHAT would you do in these situations…? (The names of these individuals have been changed to protect their privacy.)
Jenny, 56 years old, recently became disabled. After working for more than 10 years as a nurse in convalescent hospital, she had a stroke 5 months ago. Her family was thankful that she survived although Jenny has lost some sensation on the left side of her body. The stroke has also affected her speech. The doctor’s prognosis is positive but only time will tell whether she’ll ever be the same person again.
Jenny is married and has 2 teenage children, ages 14 and 15. Her husband works but his income alone is not enough to support the family. Jenny is temporarily receiving state disability benefits but this not enough to replace that income she’s lost. The couple owes about $30,000 in credit cards which have gone unpaid since Jenny’s stroke. Bill collectors are now harassing them, threatening to sue. The family is already dealing with enough unbearable stress as it is with Jenny’s disability. Now, their worsening financial and debt problems are causing the couple to have even more sleepless nights. Is there a way out of this miserable situation?
What would you suggest?
Matt and Cheryl seemed to be doing better financially than most people 5 years ago. They owned their own home, had steady jobs and very little debt. They’ve managed to accumulate about $30,000 in savings over the years. Because the real estate market seemed to be doing “well”, a realtor friend suggested that they should start investing in real estate. At this friend’s advice, they took all their savings and managed to purchase 2 rental properties with “little down” because of their excellent credit. Each property had a first and a second mortgage. The rental income, although short $500 on each property to cover the actual mortgage payments, wasn’t a serious concern at the time. After all, the realtor told them that this extra $1000 month that they had to fork out was going to be an “investment” that will pay off very quickly. Matt and Cheryl were very excited to become “real estate investors”.
To make a long story short, the real estate marked “crashed” as we have witnessed in the last several years. Instead of going up, real estate values in their area actually went down 30% over the last 5 years. Foreclosures became rampant with a lot of homeowners simply walking away from their properties. Matt and Cheryl also had a problem keeping the properties occupied. For months with no rental income, making the mortgage payments simply became impossible. First, they started falling behind in mortgage payments. Eventually, they lost both properties in foreclosure which resulted in total deficiencies totaling $105,000 ($40,000 on one property and $65,000 on the other), which Matt and Cheryl are now personally liable for.
See, this couple’s dream had become their worst nightmare. Not only did they lose their life savings but they are now being sued for the $105,000 that they owe from the foreclosed properties. Matt and Cheryl are scared to death as they have never been sued in their entire life. They are extremely depressed about their situation and are worried sick about their financial future. There is just no way they could pay back the $105,000 that they now personally owe.
What would you advise Jenny, Matt and Cheryl to do? These are only examples of the countless types of situations I see every day as a bankruptcy attorney. A lot of bankruptcies are filed as a result of divorce, unemployment, disability, death or sometimes, things simply didn’t work out as expected. If we all had a crystal ball, we wouldn’t have bankruptcy laws in this country.
Maybe you’ve just been laid off from work. Perhaps you’re going through a divorce or a separation. Maybe your business is failing and you’re not making money as you used to. Are you currently facing foreclosure or has your property been recently foreclosed, leaving you with a huge foreclosure deficiency that you know you’ll never be able to pay? Any of the above situations could cause serious financial problems. Because life is unpredictable, you never know when you’ll face such difficult circumstances.
Have you heard that filing for bankruptcy protection can help you get a fresh financial start? Maybe you have but at the same time, you’ve also heard that it’s the “worst mistake” that you can ever make because it will ruin your credit forever. Did you know that a lot of people are misinformed about bankruptcy that sometimes they go on for years suffering in debt when they could have done something immediately to turn their financial situation around and get rid of debt suffering? When does filing make sense for your situation?
To explore your options, call Toll-Free 1 (866) 477-7772 and schedule a free consultation. We have offices in Glendale, Cerritos, West Covina and Valencia.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped over 4,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1-866-477-7772.
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