Considering filing in Minneapolis

[minneapolis]

I have been considering filing for about 2 years. My situation can be summarized pretty easily:

I had a rental property and a primary residence. I allowed some unethical people to live in my renal and they did not pay rent and destroyed the house. I have pictures. I borrowed a lot of money to repair the house and put another unethical renter in it. They didn't destroy the house but instead chose not to pay rent. The legal fees associated with evicting them was extensive and as a result I had to borrow more money to get the house back. At that point, I put the house on the market to try to sell it. The market was not moving and neither was my house. I had no renters in it to suppliment the mortgage and after paying two mortgages for a couple months realized I could not continue to do so. I lost the house.

On the house, I had a primary and a secondary mortgage. During the sheriffs sale, the house sold for 145K. The amount owed on it was about 185K. This means that the primary mortgage was paid off but the second mortgage was not. I'm concerned that the secondary mortgage holder will attempt to collect the unpaid 40K and that is at the center of my question. You see, I can probably dig out of the credit card debt I've accumulated over the last 4 years by myself but if the secondary mortgage holder comes after me for the outstanding balance I'll have no possibility of paying that off.

I was hoping to solicit some feedback from you on this and find out what the best option is for me in this situation. Have you seen this problem before and if so how should I proceed?

All in all unsecured debt is around 13.5K (managable)
Second Mortgage debt 40K (unmanagable and unsure if they are going to persue)

Please respond to this and advise if you have any recommendations. I'd like to avoid bankruptcy if at all possible.

Kind Regards

[lrprn]

On the house, I had a primary and a secondary mortgage. During the sheriffs sale, the house sold for 145K. The amount owed on it was about 185K. This means that the primary mortgage was paid off but the second mortgage was not. I'm concerned that the secondary mortgage holder will attempt to collect the unpaid 40K...

$40K is enough of a shortfall for your second mortgage to come after that amount. Doesn't mean they will.....just that it's likely they will.

Have you seen this problem before and if so how should I proceed?

Unfortunately your situation is all too familiar here

The key is whether you can pay off your $40K owed to the second mortgage lender and the $13.5K owed to your unsecured creditors on your own within a reasonable time - typically five years. You've said this isn't possible. How did you come to that conclusion?

You didn't share your gross annual income from all sources, if you are married, if your spouse is working and their gross annual income from all sources, family size, the state you live in, and what assets you would like to keep if you do file. If you can share more about that, we can help you sort things out better.

[minneapolis]

You've said this isn't possible. How did you come to that conclusion?

You didn't share your gross annual income from all sources, if you are married, if your spouse is working and their gross annual income from all sources, family size, the state you live in, and what assets you would like to keep if you do file. If you can share more about that, we can help you sort things out better.

Thank you so much for the fast response. I don't believe I can pay off the 40K because the payment over 5 years would be $775.00 in addition to the credit card debt I owe on which would be another $350.00 / month minimum. I make ~76,500/year in salary and my wife does not work. I live in MN, We have a daughter who is 7, and I would like to keep our primary residence if possible.

Our mort on our primary res is 1750/month and that in addition to our other bills like gas, food, elec, cell phones, student loans (another 45K,) we live very lean lives. We're not wealthy people or rather we might be if this debt wasn't ruining us.

Other concerns I have about filing are the impact it'll have on my credit (which is already destroyed) and how long that'll be there in addition to a future employer potentially disqualifying me for employment based on a terrible credit history.