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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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to avoid chapter 13 or 11 - can I negotiate to pay for of the

Resolved Question:

to avoid chapter 13 or 11 - can I negotiate to pay for of the deficiency from the lender.
Lets say 10 cent on a dollar. I cannot pay any unsecured credit card debt. What happened if I dont do anything- I will NOT buy another house - for along time -maybe NEVER.
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 6 years ago.

Hi Customer,

Is this deficiency judgment based on a mortgage that was used to purchase your residence (not a refinance)?

Customer: replied 6 years ago.
foreclosure - it was a refinance - cash out - some cash went to improvement some cash went to pay the monthly mortgage
Expert:  cfortunato replied 6 years ago.

Sorry this took so long - I was called away.

With a deficiency judgment, the lender can garnish wages and bank accounts, and place liens on property. You can offer to pay a percentage of the judgment. The judgment holder will be more likely to accept a reduced amount if you are not working, and do have any property that the can attach. Additionally, judgment holders are more likely to accept 50% - 60% of the judgment amount.

Edited by cfortunato on 9/2/2010 at 12:23 AM EST
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Customer: replied 6 years ago.
do you think bk is ideal - I still have a job but to pay off the 276K lien is nearly impossible for me - I will try to do chapter 7.
Expert:  cfortunato replied 6 years ago.

Thank you for accepting my answer!

I am of the belief that debtors should file a Chapter 7 Bankruptcy whenever they have debts that are more then they can afford to pay. This is especially so, since creditors tend to make it impossible to pay the debts, because they add so much in late fees and interest to the original debts.