I guess I do know the right answer, just don't know what way would be the best to handle it. We have to give them both back but
I don't know if its best to just hand our house and van over to the bank or file for bankruptcy. Either way our credit is shot.
We owe $2000 on our van. The head gasket blew on it and it wont even start anymore. Both front struts are broke and sticking out under the hood.
On our house we owe $15,000. I know it doesn't seem like alot.. but right now the house isn't worth it. There is NO way we could sell it. It's really old.. built in 1856. There is no insulation. It costs us on a normal winter $500 a month to heat. Thankfully this winter has been warm and it has lasted us 2 months a fill. The foundation is falling.... so the house is falling. There is a 2in difference from one side of the kitchen and living room to the outside of the rooms. The electric wiring is old and way out dated. We have the black cords for wiring. The switches are either the round knobs or the push button switches. The roof needs replaced. When the wind blows pieces of the shingles fly off. The roof over the bathroom leaks. When it rains hard it runs ( not drips) into the bathroom. Now there is starting to get black mold on the ceiling. One bedroom upstairs leaks when it rains. When we tore up the linoleum in the back room it smelled strong like mold/ musty smelling. It has the old round fuses.. not a breaker box. You can't run certain things in the house at the same time or they blow. The hot water heater is starting leak.
Its going to cost us so much more to fix the house than what we have. So many of the repairs need attention soon and we don't have the money for it. The bank said they wont give us another loan until we get the loan down to $10,000 or pay the van off. So loaning the money isn't an option. Plus we just don't like living here anymore...
So what would be best? Just giving it back to the back ( voluntarily) or filing bankruptcy?
** One and done... our income is around $35,000 a year. We have some other small debts, but nothing major. I would say under/ maybe right around $2,000 but not over that. No credit cards or anything.
We are currant on all payments to the bank... paying them is not an issue. I just hate paying for the van when its going to cost more to fix it than we owe on it. And well I explained why I don't want to pay on the house. It more we can't afford the major repairs that are needed more so than saying here its broke I just don't want it anymore. :)
Thank you everyone. We aren't trying to run from our responsiblities.
Our house is now assesed at $20,000. We bought it 5 years ago in a private sale for $25,000. A guy from the bank ( the bank that approved the loan) inspected it and they told us that was all we needed as far as an inspection. Being first time home buyers we were stupid to believe them and not hire our own. We knew some of the problems but 75% of them we did not know about. We knew it would be a "fixer upper" but not to the extent that it is. We were wrong to think that we would have a longer range to fix some of the things, they became majorly worse over the past 5 years. Our long term fixing budget has became a now factor that we can't afford at the time... in a year, two.. five that might change. But right now its not doable. We did have someone come in to look at the house and they said we can not sell it how it is. We would have to rewire the house. We would have to have a breaker box. The basement would have to have a cement floor ( right now its a dirt floor) and the house would have to be braced/ jacked up and the foundation restored so its structurly safe. We cannot afford those repairs or we would do it and stay here. Plus we can't sell a house that has any mold and our bathroom does. Its not that we haven't done anything to it in the last 5 years. We did redo the kitchen as that was the worst room at the time with no cabinets and a sink that leaked. We did put on a new roof on one section of the house ( a part of the house that was added on over twenty years ago) that was leaking. We just didn't have enough to do the whole roof. We were going to tear out the plaster walls and put in insulation and dry wall, but the guy told us not to until we can have the house jacked up or it will crack all the work we do. To jack the house up will cost us $10,000. So we are stuck with it more or less and we can't afford the repairs... that is why we were considering a foreclosure on the house.
The van we noticed it was leaking oil. we took it in and they said it was the oil gasket. We had it fixed. We noticed it was still leaking and now the anit freeze was starting to drip. We took it back and they said it was fine. Took it for a second opinion and they said that it was the head gasket and it was going to cost $500 to fix that, but it wasn't major yet so we could wait a bit. They told us that the struts were broke, the first guy didn't say anything and we didn't notice it. That jumped our bill to over $2000. Two weeks after being told this when the van died in our yard. It wasn't intentional that we neglected the repairs. Its just now we can't affored to make the payments and the hefty bill to have it fixed. We can't scrap it because it doesn't have a clean title.
Thank you again for your responses! Like I said we aren't trying to run away from it. We are paying on them still. We just feel stuck in between a rock and hard spot with everything that needs done.
This is a question for legal and tax professionals. If you can't afford an attorney or an accountant to advise you, consult Legal Aid. Good luck.
It sucks, but that's life. You can afford to keep paying for them, but you just don't want to. I understand that, and wouldn't want to either... but you did promise that you would pay them when you signed up for the loans.
I think I would give the house back because it sounds like it would be condemned anyway. You could get some serious health issues being around mold like that and how dangerous to not know if the foundation or roof could give way at any moment. Do you have a place to go to? Relatives, friends or a shelter to stay at while you get back on your feet? I am so sorry you are in this mess. Have you checked to see if there are any other options for you? Do you attend a church. They may be able to help you. Even if you don't they could direct you to some local agencies like a mission or shelter that could provide some assistance for you. May God bless you during this difficult time!
Blessings,
A.
Give them back. They are bricks around your neck and the house isnt safe! Take a step back and rethink the whole situation. Your credit is shot, there is no point in keeping the 2 things that shot it.
Do you have an income? How big is your family? If I were you, I would move to a small, newer apt right in between work and the kids school. What you pay in rent wont be much more than what you pay in electric bill right now. Electric will be very small in a newer apt because they are so well insulated. Take public transportation, get a bike, and put the kids on the school bus for now. When income tax comes or you are able to save enough, buy a cash car. No car pymts and low monthly rent and utilities and it shouldn't take long to get back on your feet. Keep going the way you are and you are just going to sink in quick sand - the more you struggle, the deeper you go.
You don't say how long you have owned the house but you need to look into the regulations on buying and selling a house in your state. It sounds like your wiring is lose tube and knob wiring and in Wisconsin it is illegal to sell a house with that wiring. The seller has to re-wire, you may have a case for some kind of suit against your realtor. My house is about as old as yours but it was re-wired and had new furnaces and some plumbing work done before we purchased it 10 years ago.
Did you have an inspection done before purchase?
Contact Habitat for Humanity about getting repairs done. They often help homeowners get their home repairs done for the cost of the materials.
As far as the van goes, sell it for scrap.
What is your income?
What other debt do you have?
Can you sell some stuff to raise the money to fix the van so you CAN sell it for what you owe? That eliminates that debt--and a vehicle.
Isn't your property worth something?
Can you sell the house "as is" even for 10K and carry the other 5K debt over?
Sounds like you made a couple of investments that aren't going as well as planned. That's life. You may make things worse by dumping them back on the lenders that you promised to pay. If you don't want the house or van, then you need to investigate ways to get money back while you pay back what YOU owe on them. You may still end up in the hole in the end (paying the difference in what you owe vs what you were able to get from a sale) but you can't just hand them back and expect no financial consequences. You promised to pay them that amount. You didn't promise to pay only as long as you liked the house or car.
Friends bought when the market was high and are upside down in their home. They are renting it currently, so the mortgage is paid, and then holding off on buying a new home until things even out a little for them financially. They moved so the wife could get a better job and are renting. Sometimes you have to make difficult choices.
And for the poster whose friend got credit card offers - I get offers all the time. My credit is OK. It doesn't mean I should take them or that they'll give me exactly the offer (I freelance now and many companies don't really want to give me the 0% card they advertised). College students with no income get offers. It doesn't mean they are back on track. To be $100K in debt is a big deal and the last thing they need is a credit card.
You need to check with a realtor about a short sale. I'm not sure how it works but the bank gets something out of it and you can move and be free. I heard, maybe wrong, that some of the people just letting homes go are going to have to still pay the interest or something and are not as 'free' as they think they were. I don't know so check on it. Also check with a lawyer on the bankruptcy as I think you can do pretty well with jobs, housing, etc. now but just have that on your record and can't buy a home, etc. for so many years. I wouldn't want that but you need to decide by talking with a professional in both areas and doing what you morally think is right.
You will have to determine the future cost of both consequences. Getting rid of both may seem the option but how much will that decision cost you in the future. A foreclosure or banckruptcy that takes out your credit could prevent you from the ability to rent or cost you a lot more in either upfront or security costs or put you in an undesireable unsafe location. It could affect your ability to get a job if they do credit checks. It could cost you at the bank in fees for accounts like checking, credit. It could cost you the ability to buy a car with an auto loan or pay insane loan rates. The utility companies could require large deposits from you to have their services. On the other hand you a vehicle that sounds like it should have had regular service and was that put off because of fear of cost of repair or we'll get around to it. The house are you and hubby handy? Willing to learn? We have a 1800's house and until we could afford to do the insulation. Right we took extruded unsulation and applied it with a glue gun to the plaster and lathe and covered it with fabric it wasn't magazine beautiful but it cost is 300.00 and took our monthly bill for gas from800 to 150 and gave us all that winters savings to start the official repairs. Also do you both work full time? I know jobs are scarce but if either is underemployed to their capability then it is time to ramp it up so you can save for a year to get where you need to be. If all else fails do you have relatives you could stay with if you either decide to really renovate and keep it or if you let it go as doing this for a six month time period will help you save money and get back to where you need to be. Be safe in your decisions and if needed get help of a structural person on the house to make sure your okay safety wise and consider everything before making a rash move that will impact you for many years to come.
Those numbers just don't make sense to me. Isn't the house worth way more than $15K even if it is falling apart? If you have equity in the house even if it needs a lot of work then you'll be walking away from that money.
I just went to Realtor.com and in your area the cheapest house is listed at $69K, the most expensive is $599K. Surely it would be wise to do whatever you can to hang on to the house and make whatever repairs you can little by little.
You need to consider rent you'll have to pay and how long it would take you to pay down the loan to $10K to get another small loan to put into thte house. Look further down the road then the poor condition the home is in now.
Sell the house and van for what you can get for them. If that is all the debt you have, you won't be approved for bankruptcy. Get out from under both contracts by selling the house and car, paying off the car first and then put the rest of the money on the mortgage. You will have to take a loss on the house, probably, but maybe not. That becomes debt you pay off in the next five years by living withing your means and renting an apartment. We all have expensive lessons in life, trust me, my dh and I have both made mistakes where we had to pay off a loan for something we no longer had. No one I know hasn't made some kind kind of financial blunder or been the target of bad circumstances that cost them money.
Bottom line, you need to move for the health and safety of your family. List it and sell it SOON. Move to where you don't need a car, if you can, and pay cash for your next vehicle.
You secure a good credit rating, too, which you need to rent an apartment.
It sounds like you are just looking for an easy way out. You bought the car and the house... you need to pay for them. Yes, you still have to pay for the car. Fix it and sell it. The house sounds like it needs major repairs. Did you buy it that way, or have you neglected it? You could try selling it as a tear down and see what you get.
You cannot just walk away from what your poor decisions. Why do you think others should have to pay for your debt? Talk to a financial advisor and figure out how to solve your money problems. It may take a few years. Don't make others pay for your mistakes.
Giving the house or van back may not work. In many states, you can't just give property back. The bank will not accept the house (they might accept the van). Instead, they'll file for foreclosure.
As for the van - can you sell it for scrap for what you owe?
Bankruptcy is a big deal, it will follow you for many years. If you don't have other debt and can afford to rent an apartment with the money you've been spending on heat, then perhaps foreclosure or a short sale on your house plus selling your van for scrap will save some of your credit.
Good luck.
This is a rather confusing post. Probably me mind you but still...if I miss the mark....
You have to consider the future. Okay magic wand time, you are out of the house, where will you live and how will you afford it? I am basing this on you not being able to afford the current payments. At least I assume you can't because you are considering bankruptcy.
So based on that I am not sure what type of housing you could afford so it may be best to stay in your home and work it out somehow.
If paying the bills is not an issue then bankruptcy is off the table and your only recourse is to hand the home over to the bank.
Okay I just read what you added, you will not be approved for bankruptcy and I am not even sure you will be able to hand the home or car back to the bank either. What would happen in both cases is the bank will get for either what they can and you will still be paying on the difference.
Ultimately, if you turn the van and the house back over the bank, you still owe them for whatever they lent you minus what they can sell them for.
So, for example. You owe $2,000 on the van. If they sell it to an auction for $1,000, you still owe the bank $1,000. If you owe $15,000 on the house and they can't sell it, you still owe them $15,000.
In a bankruptcy, the goal is to discharge all of your debt (minus whatever isn't legally allowed - student loans, possibly medical... can't recall).
Either way, most bad credit stays on your report for 7 years. And both will be bad for your credit.
Stay in the house for the time being, it is shelter. If your health is doing okay and not suffering then I'd say you're safe for the time being. I would consider looking in the early Spring for another house though. It is miserable being in a home that makes you feel bad.
Christopher Lowell said one time that your bedroom is the last thing you see at night and the first thing you see in the morning so it sets the mood for your entire life. If the house is a miserable place you feel miserable all the time.
I wish we could walk away and just start over. I feel for you, but I would not put any more money in that van unless it is low mileage or fairly new. Our's has over 300K miles and is over 12 years old. The alternator went out this past week so we are keeping it plugged in to the battery charger all the time. When we go somewhere we keep it running and rush back home so it won't die while going down the street. Since the battery is just draining and never recharging it can just stop in the middle of the road somewhere....
I don't want to put another penny into it but it is all we have and our credit won't allow us to take on a car payment. So we just have to make do until we can either save up enough to buy one or hope someone will give us a better vehicle.
As for the house, if it is truly in this bad of shape I would consider using the land and putting a mobile home on the lot then leveling the house. It is often just at the point that the house cannot be saved, in this case that is what it sounds like. I am assuming you have a larger lot so you would have some space to do this. If not then it's time to move on and let the bank have it. Do not invest any more money in this toxic building.
Talk to a bankruptcy attorney about your options. A friend of mine was somehow able to file for bankruptcy, get rid of $100,000 worth of debt and keep their home (a $300,00 townhouse) and cars. It seems like their only consequence was having no credit, but within a year or two they were receiving offers from credit card companies again.
You only owe $15K on your house? I don't know how much your mortgage payment is, but in my world you don't give up on a house you only owe that much on. That's less than we pay in RENT for a year. If you gave up your house, where would you live, and how much would it cost you?
It must cost a lot less to live in your area, so I can't really advise. I think you should finish paying off the house, and then even with repairs, you'll have a cheap (free) place to live.
People sell houses "As Is" all the time. It means that the seller knows there are major repairs that need to be done but that they will not make any concessions to the buyer for them.
I've also seen "the value is in the land" associated w/ selling a property like yours. And they are often cross listed under the homes for sale section as well as the Land section.
Do your research and get a good realtor out there to put the property on as a land only sale ... that way you won't have to deal w/ house showings. If the prices are right from another poster you could probably get $30-40K for it.
I'm also confused by the bank you worked with... it's a requirement to have home insurance if you don't own your home outright.. and Ins. companies refuse to insure a house w/ the old knob fuses you have... so do you not have home insurance? did the bank not make you? They sound VERY sketchy... I wouldn't deal w/ them anymore. Once you're out of this mess move on to another institution.
Have you tried the "we buy ugly houses" people?
Ask the better mechanic about a payment plan for the repairs or if he'd be willing to buy it from you or know of any way to get it off your hands?
For crying out loud, do the right thing!
Put the house on the market asking $30,000. You'll get it. Use the money to pay off both loans & move to a safer home without mold. Save the rest of the money & add to it for a down-payment on a decent running vehicle & home in good repair. Then your credit isn't completely blown just because you don't particularly like the stuff you chose to purchase.
Try selling your house for the price of the land. You should be able to get at least 15 for it if people are buying around there. If you can afford something you should be paying for it even if it needs to be fixed.
You can try putting the house on the market for more than what you owe, but you'll have to find a cash buyer because I'm pretty sure no bank is going to loan on that house. And why doesn't your van have a "clean title." Sounds like you were trying to do too much for very little and are now paying the piper!
