What constitutes assets when considering foreclosure, food stamps & other assistance/decisions?

[ellairiesmom]

We know we need to contact an attorney or some sort of expert but we are trying to get an idea of our options.  DH has been out of work for almost 2 years, doing some consulting & making about $500/week usually.  I am now looking for part time work (worked in the financial industry for 12 years until staying home w/kids but am looking for anything) & he has been looking for any kind of work at all for over a year.  Both college graduates with more than a decade each in our fields & we can't find any work anywhere, doing anything.

Our house has been on the market for 7 mos.  We are now at the lowest price we can go that pays off the mortgage (a very fair price-dropped several times & we are taking a HUGE loss since we bought high & put a ton of $ in).  

We have exhausted our savings paying our mortgage on time every month the past 2 years.  We have no debt & excellent credit.  We are now at a point of not being able to pay our mortgage unless we start touching assets in our IRA (we rolled both our 401ks into an IRA, bonds & stocks & some sort of annuity his Mom left when she died in this investment account).  Anything we touch would incur penalties each time we touch it.    

We are ready to walk away.  His father is willing to put a mortgage in his name for a house for us in the town where my family lives which would mean half the property taxes & a much smaller mortage...WAY smaller.

Does the IRA/Annuity money count as "assets"?  Does that money in the bank basically keep us from being able to get any help in any way in terms of food stamps?  If we stop paying our mortgage, can the bank "take" that money?  What about is we did a short sale?   

[by-the-lake]

Hello, sorry you are going through this. I can give you a vague idea of what I know from my own bankruptcy consultation.

no CC debt is a great start. depending on the state, there are caps on assets such as retirement funds. In Wisconsin, its $100,000. I do know this covers 401 k's but not sure about IRA's. The bankruptcy atty will look at the equity in your home, and the fact it's not selling. Ours did.

Your atty will probably advise you to walk away from the house. It sounds like you have a viable option as far as a house to live.

Many people have had luck with short sale. The bank usually, not always, takes the loss. Your credit will reflect it, but hey, these days it's the least of your worries!

I know nothing of food stamps, but want to wish you luck and am glad you have such a supportive family!

[diana_of_the_dunes]

I'm so sorry you are going through this.    I can only imagine how stressful it must be.

I would contact your bank and let them know your situation.  They may be able to do something to lower your payments or be willing to short sale the house.  Since it's already up for sale, I'd definitely talk to someone about a short sale or even an auction.  And if you can't make the payment, you can't make the payment.  Food and utilities come first.  They probably won't boot you out for quite some time.  I had some acquaintences who lived in their house without making a single payment for over a year.  The bank understands that a house left empty is more likely to be vandalized than one with tenants.  Around here, vacant homes are often stripped of wiring, pipes, cabinets, and even studs for lumber.  If nothing else, letting you stay for free helps the bank protect their investment.

I'm not positive, but I believe that the bank can only come after your retirement if they sue you.  Even that would take ages of not paying your mortgage.

IMO, it would not be ethical to obtain food stamps if you have any kind of money sitting somewhere.  Obviously you don't want to touch it, and the penalties would eat up a chunk of it, but you do have money for food if you absolutely need it.

Good luck, mama!

[zacharysmom]

 there are asset limits for food stamps call DHS and ask  the rules have recently  changed some things are not looked at now  such as a car per family i think

[ellairiesmom]

Thx so much Mamas.  I went onto the NJ site for assistance & by the wording they use, I suspect our "investment" account will prevent us from being able to attain any assistance.  I agree that Food Stamps should really be for folks who have no other options.  I just have some friends who make decent $, BUT have nothing in savings and they were able to qualify for help with their energy bill & free winterization.  Our energy bill is killing us so that would have been nice.  

We are going to stop paying the mortgage & talk to a real estate attorney.  Our house is worth more than we owe right now but if we list it any lower, we'd have to bring $ to the table so the agent gets paid.  We have 2 more months on the sell contract & are thinking of switching to For Sale by Owner after that.

[GirlBoyGirl]

Originally Posted by ellairiesmom 

Thx so much Mamas.  I went onto the NJ site for assistance & by the wording they use, I suspect our "investment" account will prevent us from being able to attain any assistance.  I agree that Food Stamps should really be for folks who have no other options.  I just have some friends who make decent $, BUT have nothing in savings and they were able to qualify for help with their energy bill & free winterization.  Our energy bill is killing us so that would have been nice.  

We are going to stop paying the mortgage & talk to a real estate attorney.  Our house is worth more than we owe right now but if we list it any lower, we'd have to bring $ to the table so the agent gets paid.  We have 2 more months on the sell contract & are thinking of switching to For Sale by Owner after that.

Well look into it. We have $8,000 in an IRA and that didn't prevent us from getting FS as our income was pretty low. It's worth looking into. I applied online so it was really easy and saved me the embarrassment (maybe I shouldn't be so proud) of going in to the office and applying. GL!