HELP! Need answers

[pambysue]

I received the notice to vacate today. I have already moved from the premises, however, the "referee's deed" says the bank my mortgage is through is the Grantee and "in consideration of $1000 paid by the Grantee, being the highest sum bid at the sale under said judgement, does hereby grant & convey unto Grantee the premises".
Does this mean that the house sold for $1000 and I will have a deficiency for about $88,000???
I was putting off filing bankruptcy because I have been able to 'scavenge' a lot of overtime to try to make good with my few debts. My unsecured debt (credit cards, etc) only totalled about $5000 and it didnt make sense to file bankruptcy and have that as well as a foreclosure on my record if I could earn extra money and at least pay my unsecured debts. I am currently over the median income for NY state and even if I had a wage garnishment, 10% of my pay would probably be less than a chap 13 plan. But, if they are to hit me with an $88000 deficiency, thats another story.
Any advice is greatly appreciated!!!
Thanks

[SinkingFast]

Well,............ I don't think, when all is said and done that your deficiency balance will be $88K. Remember, the mortgage Lender is gonna sell the house to someone else. Eventually.

They'll take your mortgage, add on their costs for the Foreclosure, all your lates, penalties, interest, and fees. Plus, any costs to fix up or repair things needed. Plus any back taxes and such owed. So the Lender's real costs could be much more than the $88K you owe. BUT, they are gonna sell the house to someone for some amount of money.

Every link I found said in NY, you are responsible for the deficiency balance. BUT, all the links were old information. From the late '90's, early 2000's. So maybe there's been a change of law.

This is a question you need to ask BK attnys.

If you can't be held responsible for the deficiency balance and you can pay your other debts, there would really be no reason to file BK.

BUT, if the Lender can hold you responsible for the deficiency balance, then you might want to seriously consider filing BK.

[pambysue]

Thankyou Sinking!
So, the deficiency (if any) would come into play after the mortgage company sells the house to someone? I was figuring $88000 because I owe $83000 on the mortgage and approx $5000 in fees to be added.
Lets say the house is fixed up for another $8000 tops, that would bring it to $96000 needed to recover the cost by the mortgage company. Houses in my area sell from anywhere from $75000 to $120000. So, worst case is the house would sell for $80000. Would that mean a deficiency in the amount of $16000? And how long is it that the bank would take to file a deficiency? I thought there was only 90 days after the notice to vacate. Do they not hit you with a deficiency until the bank actually sells the house and recoups their money? I am REALLY not very well versed on this. but I have been trying to research as much as I can online.

[SinkingFast]

NY is tough to find any info about Foreclosures on. There's lots of old cases, newspaper articles, and such, but not much new info. And the Laws/Codes are bad to search as well.

Honestly, I don't know. Schedule a Consult appt with a BK attny you haven't seen. Make sure it's free. And ask the attny. Most likely you'll get your answers that way.

[SamanthaJones]

It could take a year for an actual judgment.

The place has to sell first, then the rest of the papertrail and suit, etc. I have heard an average foreclosure results in a $30,000 loss to the lender. If you owe $83,000- the place may be worth $85,000, say, and add, say $15,000 in legal fees, plus sales costs, and etc. (say $8000 more)- you are up to $108,000- and it sells for, say $77,000- their loss is about $30,000. This is speculation on my part, however- just a guess. But you can see clearly the consequences of the lender losing money- and why bankruptcy is such a nifty solution to an otherwise unbearable debt burden- if you had the money to pay that lender, you could easily pay your unsecured debt also, eh?

[pambysue]

Thankyou both for your words of wisdom!
I think what I may do is play the 'waiting game' and see if & when they plan to sue me for a deficiency before thinking about BK.
As of right now I would be well over the median income for a chap 7, however my overtime will be diminishing over the next few months. With my overtime right now, I can pay my creditors. But, if I get hit with a huge deficiency judgement in the next year, i wont be able to pay that as well. But, hopefully by then, I will be under the median income for NY and will be able to do a chap 7.
If they do get a judgement and start a garnishment, is it only 10% of my gross pay that they would take?
If they were to get a garnishment before the end of the summer, it would cost me more than 10% of my gross pay to pay into a chap 13..which is the BK plan I would have to do, no doubt, and I would probably be better off with the garnishment than a chap 13.

[lrprn]

If they do get a judgement and start a garnishment, is it only 10% of my gross pay that they would take?

In New York, after a judgment is granted in court, a creditor can garnish up to 10% of your gross income or the federal maximum, whichever is less. The federal restrictions on garnishment are too long to list here, but they are laid out in a fairly understandable way at http://www.bcsalliance.com/ccpa_15usc1673.html . Hope this helps!

[pambysue]

Thankyou so much lrprn! That link was very informative.
I appreciate everyones help with my dilemma!!!!