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HI SCOTT: My wife and I both got divorced from our former spouses in the early 80’s, sold our houses and bought a new house together in 1997. All 6 kids have graduated from high school and 5 have graduated from college. Our divorces created…(cont.)

Question Continued…financial hardships on both of us that resulted in credit card debt. When we bought the house in 1997 we paid off all credit card debt from the equity of our houses and had enough left over to put money down on the new house. We kept using credit cards to pay for unexpected expenses and the many additional costs associated with putting kids through college. We had no significant savings. Periodically we would refinance our mortgage to a better rate and for a greater amount, as the house had significantly appreciated in value, and each time we would pay off the credit cards. The last time we refinanced, we did so with a 5-in-1 ARM, because had had decided to move in to a smaller house once all the kids were out on their own. Following the housing market, and having our house appraised by banks and several different realtors, we were assured that we had approximately $150K of equity when it came time to sell the house. Then, unexpectedly by all, the housing market crashed and the significant number of foreclosures in our area brought the value of our house down. We ended up selling our house for $170K less than what the consensus of realtors had told us to list the house for. We had to sell it because we would not be able to afford the increased payments when the 5-in-1 ARM ran out. That left us with over $90K of unsecured credit card debt and no house. We have been able to make minimum payments using the little bit of savings we had, but our savings are now gone and can no longer keep up. How can we get out from this predicament?

Answer: Sorry to hear your story and unfortunately you are not alone in your situation which sounds like it was largely caused by the aggressive tactics of the mortgage industry before the current real estate bust. The 2 types of debt relief are debt management or debt settlement. I suggest you review both options on this site to help you determine the one you think may be best for your situation.

Probably the easiest way for you to learn is by watching my video which I think does a good job of explaining the 2 options. You can watch my debt relief video here.