Credit lines

[NLYTN]

Have you considered renting the house or renting out rooms. Just my 2 cents.

[Anonymous]

Yeah I considered renting but it didn't look very appealing.   I would still be paying out $200-300 a month because the rent would not cover all the expenses.   I'm in Illinois and the laws favor tenants.   If someone stops paying it takes you 4+ months to get them out....have to take them to court.    Also, if they cause more damage than your one month security deposit you lose.  .   And you could go a few months without any renter.   That would be a disaster To have to pay apartment rent and house payments.  You have to pay income taxes on rent too.  In sum, renting is very risky.

ps.   My previous full time salary job had nothing to do with stocks or the markets.    I was buying and selling some stocks on the side 

[Anonymous]

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@Anonymous wrote:

Yeah I considered renting but it didn't look very appealing.   I would still be paying out $200-300 a month

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I don't understand how this doesn't sound appealing to you. That sounds a lot cheaper than not have any renters espeically with your $22K income. Your rent would be a little over 16% of your monthly income.

[longtimelurker]

I would suggest (as others have done) getting some advice from local organizations (at least to supplement advice from the foreclosure section here).   For example, one of your  questions about which a landlord would find better, maintaining your 25+ years of credit card payments with a foreclosure, or paying off the $20K and risking your credit cards.   As you saw, you got some opposite answers, but, as takeshi would remind us, it doesn't really matter if 100% here said the same thing, what matters is the landlords in your local area of IL (or wherever you may relocate).

You can clearly make arguments either way (e.g. OK, you  have great credit card history, but I see a foreclosure, so maybe now you can't pay your ccs either and then you won't pay my rent), so advice from organizations with real local knowledge is needed.

[Kevin86475391]

I agree there's no substitute for expert advice from someone knowledgeable about the local rental climate. But for what it's worth, hypothetically if I were a landlord I'd probably rather see the good history on the credit cards, and I definitely think being able to offer a few extra months rent as "security" would help too.

Anyway best of luck with whatever you decide to do!

[Imperfectfuture]

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@Anonymous wrote:

I live in Illinois and it's a recourse state.   They have to go through a judicial process to foreclose.   They can also sometimes get deficiency judgments against you after foreclosure.   I think I can be sued if I don't pay my 50k heloc too since I signed a promissory note.   Helocs are usually recourse according to my google search.  Thanks everyone for your concern and advice.    

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You can not be garnished with ssdi.  So if they threaten you with suit, bring up your income.  They can not garnish anything you have in retirement.

But, you need to lower your credit card limits, exposure anyway.  110k CL is WAY too large for 22.5k income.  So if they balance chase, might be good thing.

i know, because I am ssdi retired.  Even though I have side income, and investments, they are leery of going above a certain amount of credit.  I would get credit exposure on most favorite cards from 20k to 30k.  Otherwise, they will choose for you.

[Imperfectfuture]

I would also sell those stocks (by the way, the market went up the past several years, are you sure about this thread?), and pay the cc's off. Lower the credit cards, or pay off the house, ditch the credit cards. NEVER borrow money to invest. If you don't cash out, they can take all that money for the house.

[LadyJEsq]

So sorry to hear about your ordeal OP. Almost 20yrs ago my Mom went from working/living an upper middle class life to SSDI due to a car accident. It's been tough for her since then. We too live in Illinois and while there is some help out there for low income families, it really is a joke. I'm not sure where in IL you live, but I would look into not only financial services assistance (I believe I read about a company that helps individuals with foreclosures for free here) as well as rental assistance (here in Chicago we have CHA, but, maybe you heard on the news recently, they haven't been doing their job for years now). After a number of years on the waitlist, she finally received a call in January, and since that time they've lost her paperwork twice! She's been "homeless" (aka living with me) for almost 4yrs now and bouncing around for over 2yrs prior to that. I say all of this just so you know what you're in for if you decide to go that route. If you live in downstate IL, the rent is generally reasonable (or at least it was when I went to school there), but if you live in Chicago, rent is exorbitant. For years I've always rented from individuals rather than a management company. I've lived in my current apartment for over 10yrs and my current rent is only $105 more than my initial rent. I also pay significantly lower that what one would for a two bedroom in the city because my landlord has had the condo for so long, that his mortgage is very low. I'm about due for an increase, but I doubt it'll be above $25. Contrast that to friends I have who rent from management companies who get hit with annual rent raises that sometimes exceed 10%. I had similar success when I rented a one-bedroom house in Carbondale (southern IL) while I was in school. Individual landlords seem to be more personable and understanding. I suspect they would appreciate your good CC history and would understand the foreclosure due to the significant drop in your income. As always, YMMV.

I did a quick search to see if I could find the foreclosure company I heard about a couple of years ago and came up with some interesting hits (IMO):

http://www.chicagotribune.com/business/ct-foreclosure-program-0417-biz--20150416-story.html

http://www.ihda.org/homeowner/facingForeclosure.htm

http://portal.hud.gov/hudportal/HUD?src=/states/illinois/homeownership/foreclosure

http://www.yourillinoishome.com/financing/preventforeclosure.htm

I don't know the rules about posting links, so if these get deleted, the search I ran was "help with foreclosure illinois."

Good luck OP! 

[Anonymous]

@Anonymous wrote:

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@Anonymous wrote:

Yeah I considered renting but it didn't look very appealing.   I would still be paying out $200-300 a month

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I don't understand how this doesn't sound appealing to you. That sounds a lot cheaper than not have any renters espeically with your $22K income. Your rent would be a little over 16% of your monthly income.

I was talking about renting out the house and moving into apartment. I would be paying out $200 a month on the house with the incoming rent.  And paying for an apartment, which is impossible.   If there were months where I had no house renters while in an apartment I would go down the drain fast .  

[Anonymous]

Response to a few posts.   A couple people mentioned a foreclosure forum on these boards with great info here but I can't find one?   

Two people said I should call and  intentionally lower my credit card lines.   I'm not sure why I would do that the credit cards are my life line.  I found out you can even pay your mortgage on credit cards at chargesmart.com 

The  consensus of several posters is that I should go the foreclosure route if I can't do a short sale and keep my perfect credit card history.  Thanks for the insight on that.   It would be easier to explain a foreclosure since I became disabled, lost income. and was underwater on the house.  

someone mentioned they would force me to use the money in my brokerage account that I borrowed on credit cards to pay an shortfall on the house.    I called and they consider any money in your accounts as a tangible asset they don't cconsider it credit card money.   Therefore, the odds of me being approved for a short sale are slim to none unless I used all that money to pay down credit cards and was left with nothing in my accounts 

i cant Sell my stocks though because I would be throwing in the towel and guarantying my demise.   My stocks are my only hope.   They have gone down 80-90% over the past few years (all commodities mostly precious metals).   If they have a huge rebound by April it could get me enough money to get out of the house clean and have enough money for credit cards.  My 28k Chase balance at 0% ends in February.   I'll have to sell some stocks and pay that off or start paying high interest.   I've never paid more than 4% on any credit card in my life so I'll probably pay that one off.   The others expire in April-June.  

In addition, my boa heloc 10 years of interest only ends in May.   Then I will have to pay an extra  $300 for principle.  Very bad things will happen in the spring if not sooner.  My only hope is a massive rally in my stocks over the next 6 months.