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Advice Needed - 7/23/2008 9:03:03 PM
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pianoteachingmom
Posts: 7
Joined: 7/23/2008
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OK, here's the situation. We are filing bankruptcy. The original plan was to file for discharge of about 60K of unsecured debt incurred while my husband was unemployed and while we tried to start a franchise business. The home mortgages would be reaffirmed and we would stay in our house. I am absolutely OK with that.
Now, my dh has decided that he would like to include our house in the bankruptcy and then rent. His reason is basically that in this market houses have not been selling for quite some time and if he should lose his job again, the house would keep us from accepting a job out of state. To quote him, "It is like a ball and chain around our necks keeping us from accepting a better opportunity elsewhere."
I have said that we could rent our home if we needed to move and could not sell it. He says that most likely renters would trash it and then we would not be able to sell without a large outlay of cash if and when the market improves. A friend at work told him that security deposits are not for damages and that in this state (MI) landlords have to sue for damages if the property is damaged.
I want to honor my husband. I love him desperately and if this house is causing him to despair, I will do it - - - but I don't want to!
Please, any input will be appreciated but understand that I don't want to hear a treatise on Christians not filing bankruptcy--- we are way beyond that.
Thanks
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RE: Advice Needed - 7/24/2008 11:14:36 AM
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pianoteachingmom
Posts: 7
Joined: 7/23/2008
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You bring up a good point. Thanks.
P.S. I will pray right now for your husband's safety.
_____________________________
Homeschool mom to two boys, ages 13 and 16.
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RE: Advice Needed - 7/24/2008 1:54:20 PM
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Miss Giggles
Posts: 4421
Joined: 4/18/2005
From: MI
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Youre in a hard place. The bankruptcy will show on any future job applications and if you work for the government, its a possibility they could rescind a security clearance. However there is a glut of rental houses and rental's aren't full because a lot of people moved out of state. You need to think and pray about which direction to take. I live in Michigan so I know a little about the market here.
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RE: Advice Needed - 7/24/2008 2:09:33 PM
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blessedinnyc
Posts: 2007
Joined: 10/12/2007
Status: online
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quote:
ORIGINAL: Miss Giggles
Youre in a hard place. The bankruptcy will show on any future job applications and if you work for the government, its a possibility they could rescind a security clearance. However there is a glut of rental houses and rental's aren't full because a lot of people moved out of state. You need to think and pray about which direction to take. I live in Michigan so I know a little about the market here.
You've got an excellent point. A lot of people are moving out of the state of Michigan. There are houses in various parts of Detroit that are currently selling for $5K or less because they can't find anyone to rent them.
However, I think that the long-term macroeconomic picture for eastern Michigan and Ohio looks pretty good. With a weak dollar, it's much easier for US manufacturers to compete, which will mean more jobs in Michigan, Ohio, and other parts of the Midwest. If the OP's husband is worried that your house will decline another 25% in value, I think he may be a little too pessimistic.
Speaking from a coldly rational financial perspective, BK is only going to make sense if your house's value is significantly lower than the loan value. Do you feel this is the case?
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RE: Advice Needed - 7/24/2008 2:25:53 PM
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Miss Giggles
Posts: 4421
Joined: 4/18/2005
From: MI
Status: online
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I think the bottom will come soon in the housing market here but I am not an expert. But a lot depends on pianoteachingmom's husbands profession and unfortunately, age. A lot of the laid off people are mid career. Unfortunately they laid them off and hired younger people to work for less.
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RE: Advice Needed - 7/24/2008 7:43:59 PM
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pianoteachingmom
Posts: 7
Joined: 7/23/2008
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quote:
ORIGINAL: Miss Giggles
You're in a hard place. The bankruptcy will show on any future job applications and if you work for the government, its a possibility they could rescind a security clearance.
Security clearance is not an issue, since he is not a government employee.
quote:
However there is a glut of rental houses and rental's aren't full because a lot of people moved out of state. You need to think and pray about which direction to take. I live in Michigan so I know a little about the market here.
You're right about needing to think and pray about the direction. I have done some looking at rental listings and it does seem there are plenty of houses available in our price range. One of my concerns is that if the market does turn around a good rental we may be living in could be sold out from under us.
_____________________________
Homeschool mom to two boys, ages 13 and 16.
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RE: Advice Needed - 7/24/2008 7:51:53 PM
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pianoteachingmom
Posts: 7
Joined: 7/23/2008
Status: offline
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quote:
ORIGINAL: blessedinnyc
You've got an excellent point. A lot of people are moving out of the state of Michigan. There are houses in various parts of Detroit that are currently selling for $5K or less because they can't find anyone to rent them.
Fortunately we're not in Detroit but in one of the NE suburbs.
quote:
However, I think that the long-term macroeconomic picture for eastern Michigan and Ohio looks pretty good. With a weak dollar, it's much easier for US manufacturers to compete, which will mean more jobs in Michigan, Ohio, and other parts of the Midwest. If the OP's husband is worried that your house will decline another 25% in value, I think he may be a little too pessimistic.
Do you have any links to articles I could show my husband to back up that opinion?
quote:
Speaking from a coldly rational financial perspective, BK is only going to make sense if your house's value is significantly lower than the loan value. Do you feel this is the case?
I don't think so, but I need to ask my husband what he thinks. I would be interested in knowing why you say that BK is only going to make sense if the house's value is significantly lower than the loan value.
_____________________________
Homeschool mom to two boys, ages 13 and 16.
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RE: Advice Needed - 7/24/2008 8:00:01 PM
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pianoteachingmom
Posts: 7
Joined: 7/23/2008
Status: offline
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quote:
ORIGINAL: Miss Giggles
I think the bottom will come soon in the housing market here but I am not an expert. But a lot depends on pianoteachingmom's husbands profession and unfortunately, age. A lot of the laid off people are mid career. Unfortunately they laid them off and hired younger people to work for less.
FYI my husband's field is in Christian radio; announcing, music director, production. He is currently working as a tech support for one of the companies that produce the computer systems that automate radio stations. So, you can see, the field is pretty narrow and if he were to lose his job, we would definitely be moving out of state unless a new Christian music station or two opened in this area. We came here to work for a station that eventually centralized all their operations to their headquarters out west.
New question: do you know anything about the possiblity of "short-selling" a house and how lenders are responding to that in this market? I am trying to look at all the possibilities as we make a decision.
_____________________________
Homeschool mom to two boys, ages 13 and 16.
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RE: Advice Needed - 7/24/2008 8:10:15 PM
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Miss Giggles
Posts: 4421
Joined: 4/18/2005
From: MI
Status: online
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No I am not too familiar with a short sale. I think the lender would rather do that than foreclose though.
You need to call the lender and ask what the process is. They are pretty busy with these requests right now but they will get back to you.
FYI for the out of state people the suburbs are probably hit the hardest. There are entire blocks for sale and foreclosed in the Dearborn area
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