Posted on: 13th Oct, 2009 08:30 am
my wife's home was reposed back in nov 2007 very soon after we were married ,mostly due to spells of unemployment on her part. we both owned our own houses that were purchased before the marriage and now we live in the house that i owned.
my wife was 1099 by both the first & second mortgage at the end of 2007 and she just found out that the second mortgage has sent it over to collections & put it on her credit report.
we were under the impression that in georgia the mortgage’s companies were waiving the debts if they sent out the 1099. i also believe that the first mortgage only had a limit amount of time to file anything should they try and come after her for the amount. i am not sure about the second mortgage.
couple of questions:
(1) can the second mortgage company really send it to collection when it’s been 24 months since the repossession?
(2) are we/she still liable for the amount of the second mortgage?
(3) can they file suite and garnish her wages to try and recover the amount?
(4) can they come after my salary as were now married even though the debt was incurred when she was still single?
with our current situation and the economic climate there is no way that we would be able to afford to pay off the amount of the second mortgage.
also does anyone have any links as to exactly what a collections agency is allowed to do on this debt?
thanks
my wife was 1099 by both the first & second mortgage at the end of 2007 and she just found out that the second mortgage has sent it over to collections & put it on her credit report.
we were under the impression that in georgia the mortgage’s companies were waiving the debts if they sent out the 1099. i also believe that the first mortgage only had a limit amount of time to file anything should they try and come after her for the amount. i am not sure about the second mortgage.
couple of questions:
(1) can the second mortgage company really send it to collection when it’s been 24 months since the repossession?
(2) are we/she still liable for the amount of the second mortgage?
(3) can they file suite and garnish her wages to try and recover the amount?
(4) can they come after my salary as were now married even though the debt was incurred when she was still single?
with our current situation and the economic climate there is no way that we would be able to afford to pay off the amount of the second mortgage.
also does anyone have any links as to exactly what a collections agency is allowed to do on this debt?
thanks
Hi Huddersfield,
It seems that your wife received a 1099-A form from her lenders. This form relates to acquisition or abandonment of secured property i.e. in case a borrower abandons his/her home and the lender repossesses the property, the borrower is sent a 1099-A form. This is different from a 1099-c form, which is sent to the borrower in case the lender forgives the deficient amount arising out of the foreclosure sale of the property.
If your wife received a 1099-A form from the lender, it does not imply that the debt was forgiven. Thus, the lender does hold the legal right to come after her for the deficiency. In this case, her lender opted to sell off the debt to the collection agency. Now, the collection agency will try to recover the deficient amount from her.
Since your wife is the only one on the mortgage, she is fully responsible for the deficiency. The lender can go after her. But they cannot go after you as you did not sign on the mortgage promissory note. The collection agency can file a lawsuit against her and garnish her wages to recover the deficiency, though, they cannot come after your salary. She cannot claim any protection against the deficiency judgment as the second mortgage is not considered as a purchase mortgage.
Thanks,
Jerry
It seems that your wife received a 1099-A form from her lenders. This form relates to acquisition or abandonment of secured property i.e. in case a borrower abandons his/her home and the lender repossesses the property, the borrower is sent a 1099-A form. This is different from a 1099-c form, which is sent to the borrower in case the lender forgives the deficient amount arising out of the foreclosure sale of the property.
If your wife received a 1099-A form from the lender, it does not imply that the debt was forgiven. Thus, the lender does hold the legal right to come after her for the deficiency. In this case, her lender opted to sell off the debt to the collection agency. Now, the collection agency will try to recover the deficient amount from her.
Since your wife is the only one on the mortgage, she is fully responsible for the deficiency. The lender can go after her. But they cannot go after you as you did not sign on the mortgage promissory note. The collection agency can file a lawsuit against her and garnish her wages to recover the deficiency, though, they cannot come after your salary. She cannot claim any protection against the deficiency judgment as the second mortgage is not considered as a purchase mortgage.
Thanks,
Jerry
You're right, Jerry. The collection agency has every right to collect the outstanding debt and pursue a judgment against the borrower for non-payment. But practically, there are not many collection agencies that would like to incur extra cost of pursuing a judgment against a borrower. Had the original lender thought the debt was recoverable, they'd never have sold it off to the collection agency. This is why, I personally believe, the chances of the collection agency suing you for the debt are less, though not absolutely impossible.
The collection agency would instead be more willing to do a settlement for the debt. They are most likely to be open for a negotiation. Thus, you can negotiate and convince them to accept a short payoff amount for the debt. If you cannot pay it off at one go, you can enter into some sort of a repayment plan and pay it off through monthly or periodic payments.
The collection agency would instead be more willing to do a settlement for the debt. They are most likely to be open for a negotiation. Thus, you can negotiate and convince them to accept a short payoff amount for the debt. If you cannot pay it off at one go, you can enter into some sort of a repayment plan and pay it off through monthly or periodic payments.
Your right, I looked and she has a 1099-A so they did not release the debt. Sounds like they sold it to a Collections agency who will be coming after us after the debt.
Does anyone have any link about what I can expect from the Collections agency and what type of negotiations they might be looking for?
Does anyone have any link about what I can expect from the Collections agency and what type of negotiations they might be looking for?
Hi Huddersfield,
As Savior had already mentioned, the collection agency can file lawsuit against your wife. They can garnish her wages, come after her checking accounts or put liens on properties owned by her. She can now contact the collection agency and talk with them regarding this debt. They might not be willing to accept on a short pay off and threaten to take legal action against her. But with a little negotiation, she can reduce the balance amount owed on the second mortgage. She can also pay it off through a repayment plan.
As Savior had already mentioned, the collection agency can file lawsuit against your wife. They can garnish her wages, come after her checking accounts or put liens on properties owned by her. She can now contact the collection agency and talk with them regarding this debt. They might not be willing to accept on a short pay off and threaten to take legal action against her. But with a little negotiation, she can reduce the balance amount owed on the second mortgage. She can also pay it off through a repayment plan.