Legal Question in Credit and Debt Law in Illinois
Like many people, my friend, who lives in Illinois, got herself into a financial mess by taking care of her adult children, e.g. letting the son, who is out of work, use her credit card and him racking up $12,500 in debt in three months and lending her daughter money. Now the credit card people are calling as there have been no payments made since Feb.2010. She also took out, at her son's urging, a $30,000 home equity loan which she continues to make the payments on time. The condo, which could sell for anywhere between $60-$80,000, is paid.
Since she has "too much equity" in the condo, she can't file for bankruptcy, and since she is on Social Security there is no income for a repayment plan so to speak of, and she is thinking about walking away.
My question is: would this person be eligible for a reverse mortgage? If not, is there any way out for her? Thanks for any input.P.S. I live in California, she lives in Illnois.
2 Answers from Attorneys
Here are some vague bits of information--without talking to this individual and knowing much more about her situation, there is no way to give any advice, or even make suggestions.
Depending on her age, she may be able to obtain a reverse mortgage, however the fees on reverse mortgages can be quite high. She might be best served by either getting another home equity loan, or letting the credit card companies sue her. There are limits on how much they would be able to take, assuming they sue her and win. In any event, she should talk to an attorney directly, since these may be bad ideas in her particular circumstance, or there may be other actions she can take after discussing the entire situation with an attorney.
Why is there "too much equity in the Condo". She has a $15,000.00 homestead and a $30,000.00 lien on the condo. costs of sale would be at least another $6000.00. So at most you are talking about a couple of thousand in equity.
You need to get an honest BPO.
In answer to your question, yes she could get a reverse mortgage.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
