Let me just paint you a picture. You have a two income family with two children and a lovely house. Your mortgage payment is around $1200 a month plus taxes and insurance. It’s not too bad and hovers around 30% of your income, so you’re sittin pretty.
Bam!! One of you loses your job, and your mortgage payment is now 60% of your income. In order to pay the mortgage you have to pay your other bills with credit cards in hopes that you get a new job soon. But the economy sucks, your cards are maxed out, and you’re passed due on the mortgage, so the bank is foreclosing on your home.
You finally decide that bankruptcy is the best option. So you go through bankruptcy and you say to yourself “I’ll get a modification on my mortgage and keep my home. Even though they’ll only bring it down to $1000 a month I’m sure I’m bound to get a job soon.”
Why would you put yourself through that again? Why would you want the sleepless nights and all of that stress weighing you down to pay a mortgage you can’t afford? Why would you put yourself into that cycle?
Am I missing something? Is it because I haven’t owned a home before so I don’t know the feeling? Maybe it’s a good thing this is happening to people every day. Kids will get to be on the outside looking in as their parents stress out over a house.
I know that if I was in that position I would have tried to do whatever I could to get rid of the house. Makes me wish I had a guide like this one. Maybe try renting it out if you owe more than it’s worth. You don’t need to make a profit, just rent it for whatever covers your cost. I know that would be good for you and I’m sure some family would love to rent a home from you because it will be cheaper than renting from someone trying to make a profit.
If anything, and I was forced to bankruptcy, I would absolutely not keep my house. My family’s well-being is much more important than some drywall.
What do you think?