Legal Question in Credit and Debt Law in Georgia

If you get sued for $5000, your creditors could take your home. You MAY, depending on the value of your home, be able to file bankruptcy without losing the home. You MAY have other options depending on details of your situation. See a lawyer to weigh your choices.

The obvious first choice is to do anything you can to find a job and get an income. The jobs are out there - people just have to want to find them, then be willing to do whatever work is available. A bankruptcy would be a huge risk and it is not likely a good option. It is also unlikely a creditor actually would take the house for a $5000 debt. If they get a judgment, they are much more likely to just put a lien on it. Again, you failed to tell us why you can go out every day to find a job and pay the debt. If you can't, the option might be to put the house up for sale, pay the debt, and rent..

You say that you have no job or income. How are you managing to pay your daily living expenses? Are you retired and on Social Security?

You have a couple of options. I do not know your age or circumstances or what other assets you own. Doing nothing is not an option as you own the house free and clear and it is at risk. So you have to do something.

If you are over 62, have you considered a reverse mortgage? You can be directed to a reputable lender through www.hud.gov and you can get more information about reverse mortgages there. Don't just call the number on the screen for the Robert Wagner ad on tv. Reverse mortgages are where the mortgage lender pays you. At least it would put some income in your pocket and might enable you to save up and get rid of this debt.

You could sell your home, but I don't think that such a drastic action is called for unless you have other debts. You could try to take out a very small home equity loan in an amount needed to settle the debt. Yes, I said settle - that means paying less than the $5000. It depends on who the creditor is, when you became delinquent on the debt and the reasons that you cannot pay. If you can scrape up at least $2500 and can pay in a lump sum, some creditors may be willing to accept that as settlement. Most creditors will settle for between 50% and 80%, some will only let you make 2-3 payments and some are more flexible. Generally, paying in a lump sum is preferred - if you want to stretch this out they are going to want the full amount.

There are many scam artists out there. Here is a link to one of the few reputable debt resolution companies: http://www.national-legalcenter.com.

As an alternative, have you tried consumer credit counseling? They will want you to pay the whole amount but at least they will reduce the interest. You can go to www.nfcc.org and find the area closest to you.

I also do private debt settlement for a reasonable fee if you are interested. If you would like me to review your circumstances or, if you have the funds, to help resolve your debt, then please contact me at [email protected]. I give free consults via email.