Hi there
I would appreciate any advices and opinions
Here is the situation:
We purchased a 500 000$ property which included a house and a business( used car dealership with service department) in 2007, we never missed any payments our credit was perfect in high 700s (780 and 785)
The mortgage is under my name only, we have a 2nd mortgage with the previous owner for 70000$ with 8% interest rate for 2 years with balloon payment due on June 2009.
We are relatively young and this was our first property we ever owned, we put about 100 000$ down with all the closing costs and everything else to start with.
We did few mistakes to begin with, we send 3 year tax returns that they provided us to our accountant and he said everything looks fine, but for 2006 they said they havent filed them yet and they kept saying they will give it to us in few days, long story short we were so excited that we overlooked that.
After the closing we started operating a dealership, we cut almost 60% of the expenses comparing to previous owners like gas, electric, internet, phone, we disconnected home phone, garbage and everything else.
We even let go the general manager who was making 5000$ a month, just to cut operating costs but still I had to put 10000-20000$ to business checking every other week, about 6 months down the road I started putting money from our credit cards just to keep up, we have been selling cars and doing other maintenance job as well. Anyway local banks gave us lines of credit and account just to purchase inventory (cars) for our lot.
We started using that money to keep business going, we didnt spent even a penny to maintain our house or to purchase something for personal use, we didnt go to vacation since we purchased this place.
In April 2009 bank found out that we are missing few vehicles on our lot, they wanted us to pay them off by the end of the day, they closed my line of credit few weeks ago so I had to pay them 50000$ and I was in a situation that I wasnt able to come up with the money. So they closed my account and took all the vehicles back. We closed our offices since we didnt have anything to sell anymore.
I stopped paying my 1st mortgage and my 2nd mortage in June 2009, needless to say the bank that took my cars back sued us and placed a judgment on me and my wife, I stopped paying my credit cards in Septemper 2009 since that judgment showed up on my credit report.
I put my property for sale, and now I have a buyer
I have a company who leased it for a year and I have a buyer for about 500 000$
Judgment amount is 200 000$.
I tried to negotiate with the 2nd mortgage holder but he denies that he lied to us in the 1st place ( I dont want to put everything here) as soon as he found out that we leased it he went to the company that leased it from us and said that this property is being foreclosed, have no idea why he is doing it but he is something else.
Anyway now I am in foreclosure process, company who leased it wants to stay there, buyer wants to keep them there, but the only problem is 2nd mortgage holder is trying to convince me to go foreclosure route so he can buy it from the bank and he is saying that he will pay me 30 000$ under the table, I said no since I am not interested.
Dont get me wrong I desperately need money and I am financially broke but I have a judgment for 200 000$ that wont go away even if I do a bankruptcy, since they say there was a breach of contract.
How can I pay less to 2nd mortgage holder since it seems he is in win win situation
Thanks a lot
I would appreciate any advices and opinions
Here is the situation:
We purchased a 500 000$ property which included a house and a business( used car dealership with service department) in 2007, we never missed any payments our credit was perfect in high 700s (780 and 785)
The mortgage is under my name only, we have a 2nd mortgage with the previous owner for 70000$ with 8% interest rate for 2 years with balloon payment due on June 2009.
We are relatively young and this was our first property we ever owned, we put about 100 000$ down with all the closing costs and everything else to start with.
We did few mistakes to begin with, we send 3 year tax returns that they provided us to our accountant and he said everything looks fine, but for 2006 they said they havent filed them yet and they kept saying they will give it to us in few days, long story short we were so excited that we overlooked that.
After the closing we started operating a dealership, we cut almost 60% of the expenses comparing to previous owners like gas, electric, internet, phone, we disconnected home phone, garbage and everything else.
We even let go the general manager who was making 5000$ a month, just to cut operating costs but still I had to put 10000-20000$ to business checking every other week, about 6 months down the road I started putting money from our credit cards just to keep up, we have been selling cars and doing other maintenance job as well. Anyway local banks gave us lines of credit and account just to purchase inventory (cars) for our lot.
We started using that money to keep business going, we didnt spent even a penny to maintain our house or to purchase something for personal use, we didnt go to vacation since we purchased this place.
In April 2009 bank found out that we are missing few vehicles on our lot, they wanted us to pay them off by the end of the day, they closed my line of credit few weeks ago so I had to pay them 50000$ and I was in a situation that I wasnt able to come up with the money. So they closed my account and took all the vehicles back. We closed our offices since we didnt have anything to sell anymore.
I stopped paying my 1st mortgage and my 2nd mortage in June 2009, needless to say the bank that took my cars back sued us and placed a judgment on me and my wife, I stopped paying my credit cards in Septemper 2009 since that judgment showed up on my credit report.
I put my property for sale, and now I have a buyer
I have a company who leased it for a year and I have a buyer for about 500 000$
Judgment amount is 200 000$.
I tried to negotiate with the 2nd mortgage holder but he denies that he lied to us in the 1st place ( I dont want to put everything here) as soon as he found out that we leased it he went to the company that leased it from us and said that this property is being foreclosed, have no idea why he is doing it but he is something else.
Anyway now I am in foreclosure process, company who leased it wants to stay there, buyer wants to keep them there, but the only problem is 2nd mortgage holder is trying to convince me to go foreclosure route so he can buy it from the bank and he is saying that he will pay me 30 000$ under the table, I said no since I am not interested.
Dont get me wrong I desperately need money and I am financially broke but I have a judgment for 200 000$ that wont go away even if I do a bankruptcy, since they say there was a breach of contract.
How can I pay less to 2nd mortgage holder since it seems he is in win win situation
Thanks a lot