Solving the Knoxville Foreclosure Crisis
One Homeowner at a Time

Rick Smenner

RE/MAX Preferred Properties
[email protected]

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Knoxville Short Sale Question: What If I Have A Judgement Against Me?

imagesIn our Ask the Expert Section, we recently received a question from Lyle, “I'm in a tough situation. I lost my job and went through a messy divorce. I can no longer afford to make payments on my Knoxville home and have since then struggled to pay other bills. I racked up a lot of credit card debt during that time, and I know the credit card company has filed a judgement against me that is attached to my Knoxville home. Can I still do a short sale?" When you sell your Knoxville home, regardless of whether or not it is a short sale, all mortgages and liens must be paid off at closing. If the judgment against you is attached to the property, it will need to be paid off at closing or before closing. The thing that can be tricky with Knoxville short sales is that lenders will pay certain things, but refuse to pay others. And, not all lenders have a set standard of what they will pay. Lenders are willing to pay your closings costs, realtor commissions, and past due property taxes. Sometimes, they will be willing to pay past due homeowners association dues. As far as your judgment goes, it is hard to say what your lender will do. Luckily, though, this is not an uncommon situation. Some lenders are willing to work with you. Lenders are sometimes willing to accept less at closing to help payoff the judgement at closing, while other lenders may be a little more difficult. Some lenders, in order to approve the short sale, are only willing to cooperate if they receive a specified amount as a payoff at closing. If that is the case, you may have to work with the company that has the judgment against you. In many cases, sometimes they are willing to remove the lien if you set up a payment plan with them. Also, sometimes they are willing to accept less than what is owed, considering you situation. Lyle, considering your situation, I would say you should try to pursue a short sale. Regardless of whether your lender does a short sale or foreclosure, they are going to have to deal with the judgement anyhow. If they do a short sale, they are much more likely to get a higher purchase price, which is why they may be willing to work with you. There are no guarantees, but at this point, it is better to try something  than nothing at all. Are you facing foreclosure on your Knoxville home? Do you want to hear your options to avoid foreclosure? If so, please do not hesitate to give my team a call at 865-696-9002 or send an email to [email protected]. We've helped countless Knoxville homeowners avoid foreclosure. Give us a call today for a free consultation.

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