I've ran into some rough times. I have about $34,000 in credit card debt. $30,000 on a 2nd mortgage. and $60,000 on a school loan. My wife who doesnt work owes about $24,000 in school loans and $2,000 in credit card bills. My first mortgage is $175,000. Add all that up and it spells trouble for a $50,000 salary supporting a wife with 2 kids. My home loan which is VA guaranteed is in foreclosure. I'm gonna loose the house which is vacant because I got laid off in the town I was working in and I had to move out of state for another job. I tried selling it but that didn't work in ths market. I tried renting it out but I ended up with tenants who didn't want to pay or move (squaters). The last tenants i had stole my refrigerator an all kinds of other stuff, even my darn pool pump (go figure). I'm scared. I don't really know what to do. I can't pay everyone and I don't know who to pay first. My problem is stability. I'm in the aviation maintenance industry. When i have a job it's great, really busy for a while with overtime, then when it slows down they lay you off. When you want to go back they start you over from the begining (benefits and time in service). I had a $36,000 garantee with VA for the home loan. Are they gonna come after me for that money. I'm thinking bankruptcy, so can I add the VA in the bankruptcy. I'm stupid for getting way over my head in bills, it was just too easy. The credit card companies kept raising my credit limit. I started with a low fixed APR but they raised my interest rate to 28% even though I was never late. I asked them why they did that and could they lower my interest rate back down. They said it was because I had a risky debt to income ratio and they can't lower it because I am on time so it seems like I'm not having trouble. Now my minimum payment which I could barely affor does't even cover the interest (Go figure). I really feel like a loser, but I sit and think that the credit card companies themselves preditorial lend. So I guess I am going to file chapter 7 bankruptcy. Hopefully with the new law I can wipe the slate clean except for the school loans. That is if they don't make me file chapter 13. I thought i would share this with everyone. I cried when i was writing this. Maybe I will feel better soon.
Question- Is the VA going to try and get their $36,000 back? What should I do about them?
Thomas, I feel for you and I know exactly what you are going through. Chapter 7 is definitely going to make life livable again. As far as VA goes, you have nothing to worry about. VA does not require any losses due to foreclosure to be repaid unless you are trying to reinstate eligibility for buying a new home using the VA loan.
Just to clarify, the $36,000 figure simply indicates full eligibility. VA insures 25% of the loan amount. So assuming that $175,000 was the original loan amount then VA could stand to lose up to $43,750. The loss amount is based on what the lender sells the house for.
