At the end of our rope and ready to walk away

Posted by Adele on June 23, 2008 at 14:49:26:

Three years ago we refinanced into a loan that was fixed for 3 years and goes adjustable in August. We also took money out to pay things off and also enough to build an additional 2 car garage on our existing 3 car garage. We are self employed but over the last couple of years things have been going south and we have slowed down and let our only employee go. We are also 2 years behind on IRS payments and took out a home equity line of credit to pay one year of tazex off. Now we are over our heads. We tried to refi with a lender but were told we could not because our house was worth less than what we owe. We also tried to refi with our own lender and they wanted to tack on $25,000 to our existing loan and 2nd and a higher interest rate that brought our payments up $500.00 more & we can't afford what we pay now. A week ago we got a letter from the lender declining a refi anyway. If we hang on to the house we just get further and further into debt with the IRS & State. It was on the market for 6 months but not one person looked at it. Now we are feeling backed into a corner and we must walk away.

In california, we did take money out in the refi. If they don't get the full price of what we owe can they come after us for the balance? Is bankruptcy an option? We have always had perfect credit and this will destroy it but if something is not done the stress and depression will give me a heart attack.


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