Q: I am recently divorced. My ex-husband and I still own a home, which we are trying to sell. The house has been on the market for 18 months. My ex says he can't afford to keep paying the mortgage, and neither can I. We have no other options besides a short sale or foreclosure, but I don't want to ruin my credit. I have no savings and no family to help me. What should I do?
A: I appreciate how hard it is to contemplate a short sale or foreclosure, but it's also important to face reality and do what is right for you over the long term. If that means losing the house, then that's what needs to happen. But before we get there, I want you to contact your lender and see if there is any chance you may be eligible for a "mortgage modification" to reduce your current payment. Many lenders are now willing to help borrowers stay in their homes by reducing interest rates, extending the number of years left on the loan, or possibly reducing the amount of money that they owe. Modifications are not easy to score, due to a variety of market and administrative issues. But I recommend that you try. Another option is to take in a boarder to cover some costs.
If you can't work out a modification that makes the payment affordable, then it is time to let go of the house. Be strong. The sooner you make the decision, the sooner you can begin to move forward. It is true that a foreclosure or short sale stays on your credit report for seven years, but that doesn't mean you are doomed. With each passing year, its impact on your credit score lessens as it's given less weight in calculating your creditworthiness. You have a long life ahead of you; get past the challenges of today, and you'll be closer to reaching the happiness you deserve. I know you can do it.
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Breakup Real Estate 101
Q: My boyfriend and I bought a house together several years ago. Pretty quickly, I learned that he wasn't the person I wanted to progress with in life. I tried to convince him that we should put the house up for sale, but he wouldn't budge. He didn't want to end the relationship. I moved out and am renting an apartment. I've asked him to buy me out, but he says he doesn't have the cash. Though I paid for half the new furniture, I don't even care about it. I just want to end this co-ownership and get on with my life, and I think he should do the same. I haven't actually said those words to him because I thought he would have decided to sell by now. What rights do I have?
A: It seems that your ex isn't ready to be your ex. He thinks that keeping the home is a way of keeping you connected to him. You say you tried to convince him to put the house up for sale. Sounds to me as if you were merely asking or suggesting. That was a nice way to start, but now it's time to get serious.
You don't need his permission to sell the house. As co-owner you have a right to bring what's called a partition action in court. This is a legal process by which the co-owner of a property files a lawsuit against the other owner to force a sale and divide the profits. Let's see if you can get him to agree to unload the house without having to take this step. Often just the threat of an expensive legal battle is enough to get the other party onboard.
But that means you need to be firm about telling him what you want. I get the impression that you're finding it hard to articulate your needs. He senses that, so he's free to do and say whatever he wants. You have to be strong and lay out exactly what has to happen. If he still doesn't budge, hire a lawyer who specializes in real estate litigation and let her take it from there.
Q: I purchased a time-share with my boyfriend in 2005, putting both our names on the deed. Two months later, we split up on bad terms. He hasn't paid any of the $10,600 he owes; I've been the one making the mortgage installments. Financially, I know the legal process may not be worth it, but morally, I feel he needs to fulfill his end of the bargain. He's frequently tried to use the time-share, which is now in default due to my inability to pay. What do you suggest I do?
A: Your opinion of your ex-boyfriend's moral obligation doesn't matter right now. For two years, he's made it clear that he doesn't share your sense of duty, and you simply don't have time to try to convince him to own up to his share of the responsibility.
With the mortgage in default, you're heading into dangerous waters. Your credit is going to be ruined, and you could be pushed into bankruptcy. It's time to unload both the time-share and this loser from your life!
Because your ex is on the deed, you'll need his permission to sell. He'll also be entitled to a share of any profit, though you'll likely have to sell at a loss. Time-shares are notoriously difficult to make money on. Check out sites like the Timeshare User's Group (Tug2.net) and eBay, both popular places to list time-shares for sale. And remember, this is about starting over rather than trying to hold on to the past.
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