Asked 9/20/2010
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What happens besides a big hit on credit when you volunteer the repossession of a mobile home in a park where you pay lot rent? I have a mobile home that I owe 26,000 on and I feel trapped. I cannot keep up the payments and it is only worth about 8,000. I want to volunteer to have the home repossessed. I talked to the mortgage company GreenTree Financial and the guy said they will not come after me for the money owed after I volunteer the repossession. Is this true, will I only take a big hit on my credit report and it be on there for seven years? I also pay everything else on time and have a great credit history right now...how bad is the hit in most cases? Please help. Thank you. |
Answer 1/2 - Submitted 5/3/2011
You have to get the promise in writing that the lender will accept the mobile home in its present good condition as a complete repayment of your loan.
If the lender's representative already assured you that this is the case, and if he or she has inspected the home and has concluded that the loan company can recoup its entire remaining balance by selling the home to a new buyer, then you should have no problem getting a signed document letting you off the hook for any remaining payments.
Answer 2/2 - Submitted 5/3/2011
On top of getting the agreement in writing that no other money will be owed, you need to know that you will get a 1099C (Cancellation of Debt) from your lender that will need to put on your income taxes. There are ways to reduce the amount of income from the 1099C. You will of course need to consult an accountant, but the good news is that you CAN cancel the income on your taxes by showing a loss on the property.
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