First, it's not your house. You get to live there until you can't pay the bank anymore and then you get kicked out; so the only way you stay is if you pay, or you find some funky government program that actually works for more than .000001% of the population.
Now, let's think about this for a minute: if you are paying four thousand a month for a house, and you can rent a better house for $1,000 a month, is keeping the house a good idea?
I frequently get to talk to very, very smart people who have been hypnotized in one way or another.
If you tried to SELL them a house worth $400,000 for a price of $800,000, they'd laugh at you.
But the same people, once IN the house, desperately want to stay in THAT same house, regardless of the negative equity.
Is that a good idea?
Well, it depends on their projected retirement date. If they want to retire in 2029, it MIGHT be a bad idea.
If they want to retire in 3029, NO PROBLEM!
p.s. it's absolutely true that in some cases, a Chapter 13 will permit a stripdown of the second or third liens. Maybe. Someday. And you're trapped in a Chapter 13 for three to five years for that privilege. My prejudice is simple. If you qualify for a Chapter 7, scrape off all your debt. Reestablish your credit. Buy a house that has a little equity already. End of story.
Doesn't mean my prejudice has to control you. But I do hate to see people pay TONS more than they have to for years.
Now, let's think about this for a minute: if you are paying four thousand a month for a house, and you can rent a better house for $1,000 a month, is keeping the house a good idea?
I frequently get to talk to very, very smart people who have been hypnotized in one way or another.
If you tried to SELL them a house worth $400,000 for a price of $800,000, they'd laugh at you.
But the same people, once IN the house, desperately want to stay in THAT same house, regardless of the negative equity.
Is that a good idea?
Well, it depends on their projected retirement date. If they want to retire in 2029, it MIGHT be a bad idea.
If they want to retire in 3029, NO PROBLEM!
p.s. it's absolutely true that in some cases, a Chapter 13 will permit a stripdown of the second or third liens. Maybe. Someday. And you're trapped in a Chapter 13 for three to five years for that privilege. My prejudice is simple. If you qualify for a Chapter 7, scrape off all your debt. Reestablish your credit. Buy a house that has a little equity already. End of story.
Doesn't mean my prejudice has to control you. But I do hate to see people pay TONS more than they have to for years.
Great page. I'm subscribing to you RSS now. Thanks for the post.
A Chapter 13 Bankruptcy may be the answer for those debtors who need time to pay off certain debts and who have a steady income stream sufficient to meet the standards of such a filing. Chapter 13 Bankruptcy allows a debtor to repay his debts out of his income rather than by selling his property.