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Difficulty waiting until the end of the year before selling investment/primary home

Posted Apr 1 2024, 14:59

Our current home was an investment property that we live in as our primary home. We have until October this year to meet the 2 year exemption. At the same time, I am currently in BK Chapter 13 repayment plan until November this year. We are doing everything we can to hold off until then but with the increase in taxes, insurance, and debt; it's really getting difficult to be able to wait it out. Each month, we are draining our reserves and we have about a little over 3 months left of reserve money. 

Do you guys have any other ideas on how to get through this without having to sell now specially when its only a few months away to end of year? Really hate to give up a good amount of the proceeds to taxes and worst yet, have to pay off the BK debt in full with only a few months left before completion. At the same time, we don't want to get into financial trouble.

Current property is in the nicer part of the city where there's lots of growth. Value of the house is 1.3 to 1.5 mil. We are all in the house at 850k. Custom home built in 2022 with 2.24 acres of land. 

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Jonathan Pflueger
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  • Ben Lomond, CA
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Jonathan Pflueger
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  • Ben Lomond, CA
Replied Apr 1 2024, 15:40


In your situation, considering the looming deadlines and financial pressures, the following options could provide some assistance and get your through:

1. Hard Money Loan: Taking a hard money loan could be a viable stopgap measure to tide you over until you can sell your property or until your financial situation stabilizes. Hard money lenders typically focus on the property's value rather than the borrower's creditworthiness, which could be beneficial given your current Chapter 13 bankruptcy status. These loans can be arranged quickly, providing rapid access to funds. However, be mindful of the higher interest rates and fees associated with hard money loans compared to traditional financing. It's crucial to ensure that the terms are manageable and that this approach doesn't jeopardize your financial recovery plan.

2. Mortgage Forbearance: If you're in California and your area has been declared a national disaster zone, you may qualify for mortgage forbearance. This could temporarily reduce or pause your mortgage payments, providing significant relief. It's important to contact your lender directly to discuss this option and understand the terms, such as how the missed payments will be addressed once the forbearance period ends. Forbearance can offer breathing room without negatively impacting your credit score, but it's essential to have a clear plan for resuming payments.

3. Just Don’t pay your Mortgage?: Some may not like this option, but…. In most states the act of foreclosure is a long process (6 months or more). If you only need to make it 3-6 months this may be an option worth taking. It does have some consequences so research it and be very aware before you make this move. You should also try reaching out to your mortgage company and simply tell them the situation and see if they can help, sort of in line with option 2.

Best of luck in a very stressful and hard situation.

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Replied Apr 1 2024, 15:53

Thanks for the reply. I think trying to get a hard money loan or a private loan would be my best option. Just trying to find someone willing to help out in this situation. We should have no problem paying it back once we sell our house. Any recommendations?

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Jonathan Pflueger
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  • Ben Lomond, CA
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Jonathan Pflueger
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  • Ben Lomond, CA
Replied Apr 1 2024, 16:13

Where are you located? 

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Replied Apr 1 2024, 16:13
Quote from @Jonathan Pflueger:

Where are you located? 

 I'm in Orlando, FL. 

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Theresa Harris
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Theresa Harris
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Replied Apr 1 2024, 16:25

Why not talk to your bank first and see what they can do with the payments?  Can you (or someone else in your house) find a part time job to bring in extra income?  I'm guessing you've already looked at your expenses and cut all of the extras.

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Replied Apr 1 2024, 16:49
Quote from @Theresa Harris:

Why not talk to your bank first and see what they can do with the payments?  Can you (or someone else in your house) find a part time job to bring in extra income?  I'm guessing you've already looked at your expenses and cut all of the extras.


 Yeah, we have done everything we can already to try to make it work but we just don't want to get too close to being at risk since we only have about 3 months left of reserve. So just starting to look for a backup plan now before its too late...