Walking away from your mortgage in Georgia
I blogged in December about the dangers of walking away from your mortgage in Georgia. Since I wrote that post, enough time has passed to get a better understanding of how Americans are responding to the reality that their properties are not worth what they owe on them, and that they probably can’t sell them at any price that makes sense.
You can’t simply walk away and expect to get away with it. You will eventually be sued for the deficiency (the difference between the amount your property sells for on foreclosure Tuesday and the balance of your mortgage(s)). If you’re working your wages will be garnished. If you have a bank account or other asset accounts, you can expect your lender to come after the money in these accounts. It will take decades for you to pay off the deficiency.
Sometimes folks can’t afford their mortgages no matter what the amount of the note. Sometimes folks could afford their mortgage, but have made the decision to stop paying the mortgage and focus on paying other types of debt. This is called ‘strategic default.’
Here’s an article from the Wall Street Journal published May 10, 2010 that describes the Psychology of Strategic Defaults. This is an extremely controversial subject. If you’ve managed to pay your mortgage through good times and bad, if you’ve sacrificed family expenditures, delayed purchases so that you could make you mortgage payment, reading that other Americans could pay, but aren’t doing so, is going to anger you (to put it mildly). You’ll ask how their decision to stop paying will affect your future tax burden, your community, your ability to get a loan when others have defaulted.
I am not writing to advocate strategic default. I want you to read the Wall Street Journal article to understand how the market is being impacted by it, and I want to educate you about the results of a study that was done recently on borrowers who decide to strategically default.
The study found that borrowers who decide to default do so out of emotions like anger, fear, despair, and not because it’s actually in their financial best interests. This finding should get your attention because it suggests that things could get much worse if more Americans decide to default out of irrational fears. It’s a bit like cutting of one’s nose to spite one’s face.
If you’re ‘there’ and need help you should know that making decisions based on what is in my clients best interest is my job.
As your bankruptcy attorney, my job is to help you navigate the entire picture of your assets and liabilities and to help you decide how to best proceed. You and I will discuss the whole picture, and come up with a solution that solves the whole problem because the decision to file bankruptcy touches all of your debts and all of your assets.
If things are that bad for you, then heed my warning against trying to solve your problems with ‘solutions’ advertised on AM radio and bad TV commercials. There is no such thing as a free lunch my friends.
If you’re in distress and thinking about who you should call, consider this: unlike debt settlement companies, and loan modification companies, I don’t set make money based on what you do with your debt, or what percentage you’ll be paying back.
Call (404) 421 3706 to set up your free consultation with Attorney McDuffie