From: "Jeff Phillips" 
Newsgroups: alt.org.natl-assn-mortgage-brokers
Subject: How to get out of a big mess from a divorce?!
Date: Thu, 6 Nov 2003 23:47:11 -0500

My uncle's wife is divorcing him after 23 years of marriage. His credit has
always been perfect in the past. However, through the divorce his entire
financial situation has taken a turn for the worse. Although he's making a
good $80,000 a year in income, he is unable to keep up with at least 84
bills that arive at his house every month. That's right, 84 bills! He
doesn't know where they all came from, other than that his wife frequently
had the habbit of opening up credit card accounts in his name and maxing
them out before he even knew they existed. Currently if you add the minimum
payments from all 84 accounts, you will exceed his monthly income by like
$2000 to $3000!

He works full time at a major fortune 500 company, and is unable to be home
during normal business hours to deal with billing problems that have come
up. His long distance got slammed by some company and he was being billed
$4.37 per MINUTE to use the phone, so his phone got shut off. His mortage
company had a glitch with their server and his automated monthly checking
account debits stopped working but nobody told him this until two months
later so he got this put against his credit report. His electric bill
somehow got screwed up and he is now getting four seperate bills from the
electric company with four seperate account numbers for the same residential
address each month. He has people coming out insisting that he write them a
check for like $400-$900 in back-due electric bills on the spot in order to
keep his electricity from being shut off, but although the checks get cashed
these payments do not show up on the correct account so the problem
continues. He has canceled numerous services he doesn't need to save money,
such as his satellite TV service, but he still finds their bills being taken
out of his account each month and he can't get these problems fixed. He just
doesn't have time, not when he's at work more than full time, on the phone
with collection agencies, dealing with his divorce attorney, and trying to
run his whole house and raise his kids on his own.

When they were first married they had bought a house. When they had their
3rd kid they bought a bigger house to live in, and rented the old one out.
Fortunately they had an ideal renter who has stayed there for years and
years without really causing any serious damages or problems. The rent was
exceeding the mortgage payments on the old house, so my uncle was actually
making money off of it.

Unfortunately over the years him and his wife got into arguments when he
would find her secret credit cards. The mortgages on their two homes got
refinanced a couple of times to pay off the credit cards and other bills. In
the process of doing this, he now owes $110,000 on his old house that he has
been paying for for 23 years, even though the value is appraised at only
$144,000.  Similar terrible figures exist for the house he is living in.

Just this month his renters moved out, and he needs to get that place either
rented or sold or something ASAP because he doesn't have the money to pay
all of the credit cards his wife racked up, as well as the two mortages when
that house is not producing income. I offered to help do repairs, which
looked rather simple on the surface. Unfortunately, upon further
investigation I discovered that all of the floor joices on this old house
are rotting away and it is going to be a major undertaking to have a crew
jack the house up to replace them. If this is not done, the house will soon
fall apart.

The very same day I went over to tell him the bad news about his house's
structural problems, he explained that he had just gotten off the phone with
his mortage company. Because of the problems with their auto-pay service not
working, and the few months that he missed the due date due to the huge debt
his wife racked up,  he is now being placed in foreclousure status. (I guess
it hit 6 dilquent payments on his credit report, although two or more of
those are incorrect.) He worked out a payment plan with the mortage company
as his only possible option to avoid losing the houses.  But, this involves
giving his entire income this month to the mortage company to get partially
caught back up. That means his other 83 bills will not get paid, and his
credit which is already terrible from the divorce will now be absolutely
terrible.

What can he do?! The only option we see is torching the house to collect on
the insurance, or letting the mortage company foreclose and take it.  He's
already been denied on several other companies he has tried to refinance
through, but unless somebody approves him he'll never be able to pay all of
his bills. They absolutely have to be consolidated somehow. He doesn't care
how. I don't even think he cares if he saves the houses. He just needs to
get rid of all these bills.

What can somebody with an absolutely crappy credit report from the past year
or two (but perfect credit for like 26 years prior to that) do?! Should he
even bother paying the mortage company his entire income this month to avoid
losing the houses? One of them is probably hardly even worth what he owes
anyway. And he really seriously needs to get rid of a good few dozen credit
card bills that he can't even keep track of.

He's in debt probably well over $200,000 in mortages and close to $80,000 to
$100,000 in credit cards and his vehical loan. He's about ready to walk into
the credit union and hand them the title to his van, as he as already done
with his truck, as he simply can't make the payments.

It's such a mess. This guy is making $80,000 a year. He should be able to do
this, if only somebody would approve him to consolidate it all. But nobody
will, because everybody is looking at the mess and nobody is looking at the
history of his credit prior to the divorce.

Any ideas, suggestions, or recommendations???


Thanks,
Jeff