Tammy Trujillo: Hi I'm Tammy Trujillo. I'm here with Greg Shanfeld, bankruptcy attorney with Wadhwani & Shanfeld. You know Greg, house payments. That's gotta be the toughest things right now in the economy. People are having a really tough time making those payments every month.
Unfortunately, there are a lot of people out there and we hear about it all the time - facing current or imminent foreclosure. And that's a nightmare. Now, what can somebody do who is in that situation?
Greg Shanfeld: We're seeing ag lot of foreclosure activity out there. And there are a lot of options depending on what the situation is, ranging form Chapter 13 to Chapter 7, short sales, deeds in lieu of foreclosure, and then simply just walking away from the home.
Tammy Trujillo: Now what would you suggest to somebody who doesn't want to do that? They want to keep their home.
Greg Shanfeld: Generally, Chapter 13 is good for that. Chapter 13 is an effective way to allow people to reorganize on the payments that they're behind on their mortgage. And in the right circumstances, we can also wipe out a second mortgage.
Tammy Trujillo: And what about the person who wants to simply walk away?
Greg Shanfeld: If they want to walk away, a short sale is often a good option. A short sale is basically a real estate transaction. But what somebody is willing to pay for the property isn't quite enough to pay off the existing debt. So it involves a negotiation with the lenders who ultimately need to accept a short pay for it to go through.
Tammy Trujillo: Sounds like there's a lot of decision to be made here. How can somebody determine which is the best way to go about?
Greg Shanfeld: Well, it is fact specific and everybody has different goals. So I'd recommend just meeting with an attorney to discuss that. Everyone is always welcome to come to our office for a free consultation.