Legal Question in Credit and Debt Law in Georgia

We have a loan with a Finance Company on our home. Our payment is over $1,000 a month, considering our income is only social security and a small VA benefit, we have justified to this company that we cannot continue to pay this amount. We wrote the company and outlined all expenses and income, and requested a lower payment and/or a reduction in the 12% interest to no avail. Since they denied our request and we simply can't make the payment, can we just reduce the payment in order to cover essentials. Our ages are 68 and 72 with serious medical conditions. Our house is worth less than the balance ont he loan. Thank you.

Asked on 1/27/14, 6:40 am

3 Answers from Attorneys

Glen Ashman Ashman Law Office also dba Glen Ashman Attorney

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If you pay less than agreed, you likely eventually get foreclosed on.

Mortgage companies will sometimes, if proper application is made (writing them is not a proper application), may modify a loan. There are some requirements under federal law for this. You may do well to meet with a lawyer and look at your overall finances and weigh options.

Answered on 1/27/14, 6:49 am

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Robert Gardner Hicks, Massey & Gardner, LLP

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I agree with Mr. Ashman that if you simply start paying less than the monthly payment, you risk having the mortgage foreclosed upon. One option is to refinance the loan with a traditional mortgage company. If your income is fixed, and a better interest rate will drop a payment to an amount you can demonstrably afford, a mortgage company may be willing to refinance, although the value of the house being less than the loan could disqualify you from some conventional loans. If this is a second mortgage, and the balance of the first mortgage is more than the value of the house, a bankruptcy may be an option to strip the second mortgage off the house and discharge it.

Answered on 1/27/14, 7:13 am

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