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I’m always happy to take questions so I can help. Today, Linda has sent in the following question using the online form. If you have a question, send it on in. I love to help.

Linda Asks

I will be 60 years old Saturday and I’ve never been more in the dark!

When my mother fell ill in 2003 I was unable to take care of my income tax business as she required 24 hour care.

Somewhere between then and now “UNSECURED DEBT” has turned into a lien on “ALL REAL PROPERTY” I know that there were new laws passed while I was “away” and battling my own failing health, but now I find that the investment property that we have been trying to sell all this time has a lien on it and I won’t have anything left.

I intended to settle when I got the place sold, but now will they settle? All we have besides that property is our farm and we will lose that if we file bankrupcy won’t we? We thought we didn’t owe anything on our home and now we find out there are liens on it as well. Is there any remedy?

My Answer

Ouch, on three fronts. Not only were you fighting to support your mother, your health failed around the same time, but your business tanked and now, all this debt.

Sadly the unsecured debt remains for a reason. Without more information I assume that we are not talking about tax debt here and the reason your unsecured debt turned into liens is because you were sued and lost, in absence.

While there are certainly extenuating circumstances that surround your financial fall, there is no doubt that you were unable to focus on your personal financial responsibilities for a long time and this, unfortunately, is the result.

The good news is that if your properties can be sold, the liens will be satisfied and that will be that. In all of my years I can’t think of a single time that a secured lien holder has negotiated a reduction, since they’ve got you with the lien. The purpose of the lien by the creditor is to be patient, let it grow interest and wait for that day when you will sell the property and pay it back.

Ignoring or hiding from a lawsuit when you are sued by your creditors has no good outcome. If you don’t show up, you lose. And many people elect not to go to defend themselves because of the pain and shame they feel over their debt.

The lesson for all here is if you are sued, don’t ignore it. You’re better off going down in flames fighting it than being losing by ignoring it. Closing your eyes to it doesn’t make it go away. It just means you closed your eyes.

The remedy here really depends on the current value of your property. If your property has fallen in value to due the current real estate problems in the U.S. then maybe a reduction in the lien can be negotiated to allow for the sale of the property and repayment of as much of the lien as possible,

Bankruptcy Might Be An Option…But

Depending on the equity in your properties, bankruptcy may be an option. Property liens, except for most tax liens, can be stripped off in bankruptcy.

Going bankrupt does not get simpler as each year passes so I always urge people to find a bankruptcy lawyer and visit with them, not with the purpose of filing but gaining more information. You can find a local attorney to talk to through this bankruptcy lawyer link.

Go and discuss our situation with the bankruptcy lawyer, not with the intention of going bankrupt, but finding out more information if bankruptcy is an appropriate legal solution for you in your situation. Information will bring light to your otherwise dark situation.

Even if you begin to think that it might be an option for you to use to strip the liens, sleep on it. Don’t make a decision to go bankrupt on your first visit to see the bankruptcy lawyer.

Now Is The Time For Attention and Action

Linda, for all that time that you were not able to focus on your situation, now you’ve got to invest the time to deal, head on with it. If their are liens on the property there is probably more going on that you might not know about as well. I urge you to get a copy of your consolidated credit report. You can get your credit report online and it will show who else may be chasing you.

The reason I always insist on a consolidated credit report is because not all information is reported to all credit bureaus and if you want to get a complete credit report picture, you must see all three. You can get a really good consolidated credit report through this credit report link. It’s one that I’ve used.

If you’d like to talk to personally talk to someone about your specific situation I strongly suggest that you talk to Jon over at my company, Myvesta. Jon works for me and is brilliant in dealing with financial problems. Our approach is that we don’t charge a set fee for this help, you just give what you feel you can afford. For more information or access to this personal assistance, visit the Debt Expert page.

Oh yes, Happy 60th Birthday.

Steve

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Steve

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