Legal Question in Credit and Debt Law in Arizona

unseucred loan rewrite and fees

I recvd unsecured loan, then defaulted. We agreed to rewrite the loan, they want to have me pay the legal fees incurred to write the new loan. Since the loan is restarting again, I dont feel I should have to pay as part of new agreemeent. They say, if not, they will encumber my home which is negative at bank already (no equity). what happens if they put lien on my home that has no equity in it for next several years (I am not in default with home mortgage). My credit is already bad, so if they lien my home, they are in second position. and if I eventually sell or return my home for no equity...they get nothing, correct? The loan is unsecured at this moment, but I have no collateral or equity to give them...what are my options if I let them just lien my house and I then dont have to worry about monthly payments at this time, but need to clean up if I sell my house later on...I look forward to your response.


Asked on 11/07/07, 5:04 pm

1 Answer from Attorneys
Debra Palomino PALOMINO LAW FIRM, P.C.

Re: unseucred loan rewrite and fees

Even if you give security (lien) for the revised loan, the creditor could still garnish your wages if you are working. Since you defaulted on the initial loan, it is not out of line to request attorney's fees incurred for offering a revised loan. If the loan goes to a judgment (then a lien once recorded) they will get paid once you sell or refi. The creditor couldn't seize your home if there is no equity. You should have homestead rights.

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Answered on 11/08/07, 6:43 pm


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