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Home >> Manage Your Money >> Debt Management
Managing Debt in a Condo Situation
I have been living in an upstairs condo that I puchased seventeen years ago. I refinanced, and now owe $80,000 on it. Others in my complex are going for about $55,000 at this time. I became legally disabled a year ago, and climbing the stairs is getting harder all the time. My sister said I should just walk away from it, and buy another one on one level. I hate the thought of doing that. I do have money from a settlement and could buy a different one, but I couldn't do that and still pay for this one. Do you have any advice?
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 If you walk away from your debt you will face a foreclosure on your credit report. That could certainly inhibit any future credit on your part from simple credit cards to an auto loan to a home loan. If your lenders sold the condo for $55,000 they could still sue you for the additional $25,000 plus expenses, and if they deemed that to be uncollectible and did't pursue it, depending on the IRS laws at the time, the $25,000 could be reported as taxable income to you.
While we often read in today's economy that "its business", we don't think walking away from a debt is the thing to do. There are ramifications and someone, somewhere, will suffer. Put enough of these losses together and any business could go under, and that has a direct impact on all the employees there.
Published on BankingQuestions.com 5/19/10
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