Hold em or fold em?

Strange situation is playing out. What should I expect now.

The short of it is as follows:

  1. Received home equity line of credit from local bank in 1997.

  2. Sold home in 2000. A well known local attorney firm
    handled closing and sent full amount due to equity lender with Request for Reconveyance and Estoppel and whatever other reassingment docs as well. Now keep in mind that the Attorney’s Office the Equity lender and the Court House are with 100 feet of each other doing this type of transaction every day I suppect.

  3. Couple of weeks later I I received the original loan agreement I signed with the equity lenderstamped “Paid”. Over the next few weeks the original equity lender merged with larger bank and I started receiving monthly statements as if the Credit Line had been reopened. I called bank and recommened that they review and correct
    They told me they would take care of it.

  4. I continued to receive monthly statements assuming each one would be the final one. The final one never came.

  5. Within a year the home was again sold by new owners to newer buyers I have no idea of the details. I would assume title search was performed, but I wouldn’t know.

  6. One day while banking online I thought I would see I could transfer money from the Equity line to my checking account since they where both showing as open and available. I was not disappointed.

7} Now 5 years later I have become unable to pay bills due to substantial loss of income. I have not payed any payments for 4 or 5 months on equity. I received notice of default and full payment due notice and promises of foreclosure and I have not responded because I have nothing to offer at this time. Today I received a letter from Nat. Asset Recovery, Inc. stating that the account had been refered to them for collection.

What do you think there position is and how do I stand legally in your opinion? I could offer the Equity in my new home that would cover most of the debt, but I can’t keep up payments and I would lose this home. I am not willing to do that untill I run out of other choices.

I am thinking BK and let the Judge decide it. Is it possible that the loan could be negated or voided due to banks failure to properly handle this account, or am I a setting duck about to be executed.

Thats as short as I could make it.

4 reads and no replies. Not sure if thats good or bad.

Wanted to add that I just checked out web page of the National Asset Protection Company that the Bank hired. Looks like they offer collection services for unsecured debt so that makes me think that Bank is handling this as far as I am concerned as unsecured money(which I guess it is) I can deal with that my “credit” is already shot now anyway. I am still not ruling out accusations of fraud, alhough I think I would have already been charged if they thought it would stick. What do you think? I hope I can work this out with them but I am willing to give them the shaft if I have to.

How much do you earn annually?

How much is the outstanding debt?

How much do you earn annually?

  2003/70k combined 
  2004//35k combined
  2005/on pace for 70k combined 
            if wife leaves me.  I'll make 20-25K 

How much is the outstanding debt? 35k

Why do you ask?

Based on lack of replies and your curious questions I am feeling uneasy about this.

If you make more than you owe, forget bankruptcy. Pay your bills and get on with your life. Call your creditor(s) and workout a repayment plan, or, go through one of the credit counseling agencies that do this stuff day in and day out. Sometimes the agencies can get your debt reduced and/or interest waived.

Bankruptcy will haunt you for the next ten years. If you ever apply for a job that requires a security clearance or involves handling money, the bankruptcy may be a disqualifying factor. Want to apply for a new mortgage loan – one of the questions will be “Have you ever filed for bankruptcy?”

Above all, change the behavior that got you into this mess. Reduce your standard of living. If you can’t afford to pay cash, don’t buy. If you have to pay cash for every purchase, you will think twice about whether you really need the purchase in the first place.


I didn’t expect to receive a financial lecture on the moral responsibillities of a debtor. I could call my Mother for that. For the record… My household income for the last 8 years averaged around 70k more or less untill Jan. 2004 when the wife lost her 35k yr job and 2 weeks later I was fired from my 40+k yr job for purchasing from a “unauthorized” vender at 50% less than the “authorized” vender was charging. No matter

Unable to secure employment from Jan to Dec we wiped out our savings, retirements, sold assets and even cleaned gutters and mowed lawns to pay mortgage @ 1250.00 per month, car notes, utillities, gros. clothes for two children, birthdays and christmas and all the insurance needed for those things. We managed 12k taxable income from wages and 20k came from retirement which was also taxed and penalized to the tune of 10% before tax of course. We have only been on our new jobs for 1.5 months(wife) and 2 weeks (me) I also payed 6000k for retraining to get a losey 12 hr job. You got the nerve to tell me to pay my damn bills on time. In 40 years of I have never failed to pay my bills on time untill now. I called my creditors to explain why I was falling behind and ask for extra time. What do you think they did? They declare default and accelerate their efforts to collect.

All I asked for was for a opinion concerning possible litigation due to banker idiots screwing up a simple legally documented payoff and close request. I also informed them as least 20 times on phone and in person that the house had been sold and to close the damn account. They continued insisting that I had credit available, even mading it available to me via online banking service for heaven sake. How long am I required to have open invitation to the money before I accept it?. Simple as that. Now lets see them collect it. They can charge it off, they can lien on my house, they can garnish my wages, they can petition the courts to deem me insolvent or bankrurupt, they can call my house till the cows come home, my question was what the hell else can they do? They have already distroyed my credit reports so even if I do manage/agree to pay them the damage as already done. I have nothing to gain by paying them at this point.

No need to reply. I know how this money game is played. They hand me money and I am expected to pay them back 10 times over or untill death. And all of this in the sake of some judgmental paper called a credit report. Some deal right?

Anyway, you need to get back to your wheeling and dealing scaming and sceming, forcloseure scavenging underhanded dealings. I’ll worry about my own problems.

Have a nice day.

So, are you just going to give up, crawl in a hole and die??

I wasn’t lecturing before, but I will now. You say you know how the credit game is played. You took the money and now you are complaining because the lender wants to be repaid? You should have expected the lender to call the notes due after you got 4 or 5 months behind. Forget litigation, you can’t afford it. Losing proposition anyway when your argument is that the lender screwed up by giving you an unsecured line of credit.

If you have more income than you have debt, you are not bankrupt. You have the ability to pay your creditors.

Even though you and your wife now have some income, you can still do something to help yourself. Is there any equity in your house? Sell it and get that monthly mortgage payment off your back. Downsize, become a renter for much less rent than $1250 per month. With your current incomes, you have more house than you can afford. Is foreclosure just around the corner?

Wake up, and take stock of your situation. There are credit couseling agencies that will intervene with your creditors on your behalf and are able to workout affordable repayment plans for you – even after the creditors have told you NO. Take advantage of their services.

I don’t understand why you weren’t able to secure employment for an entire year. Did you just give up? Even if you had to use the days to knock on doors, polish the resume, and go on job interviews, you could have still worked the night shift at McDonalds flipping burgers. At least, you would have had some income to put food on the table. Even at minimum wage, you and your wife could have earned a lot more than just $12K.

I don’t think you need sympathy, you just need a kick in the butt.


I must say you handled my tantrum quite well. I quess that’s lesson one on overcoming adversity in a difficult situation. You are also right as rain about giving up because several times last year I did not even getting out of bed for days at a time. However, I managed to drag myself out of bed and kept food on the table and the water running. I do have small equity but not enough to settle my outstanding debts. I am in search of an owner finance or lease to purchase deal but they are few and far between. The thought of straight out renting makes me sick but, I may have to do it. To me giving up the house under these circumstances is not how this story was suppose to end…

Your advice is solid and understood. I know what I need to do. I was just venting a year of serious frustration and denial.

Thanks, you are obviously an upstanding guy and not the bandit that I unfairly labeled you to be and I applogize for my remarks.

Next time hopfully I’ll ask for some investing advice.



No offense taken, and no apology needed. I understood where you were coming from.

Maybe things are not so bad that you have to sell the house, but you may have to downsize for awhile. Could you rent out your house for $1000 to $1100 per month, and move into something that might only cost you $750 - $800 per month? Doing so could reduce your housing costs $250 per month. After your financial pressures have eased and your tenants vacate, you can move back into your house.

If your credit is “shot” now, work on getting it repaired. You should be able to do it in two years by religiously paying everything on time. Just make the minimum payment due if you are in a cash flow crunch that month, otherwise add a little more to the monthly payments. You will be surprised how quickly an extra $50 or $75 per month will help improve your debt ratios and increase your credit score.

I sincerely hope everything works out for you. Good luck.