With Beretta moving jobs from Maryland about 160 residents of Southern Maryland will have to make some difficult decissions about family, jobs and home. With the current economic conditions many of these people may be facing financial problems no matter whether they stay here in Maryland or follow their jobs to Tennessee. Rather than spending sleepless nights worrying about whether things will fall into place, we encourage these people to come in for a free consultation to come up with a plan. If they have to deal with a house that will not sell or a period of unemployment knowing the options, even if they may not be great options can give some peace of mind. Many of these people may be surprised how much owning a home complicates their decision. In normal times one would simply sell their house and use the profit as a down payment on the house in Tennessee. Unfortunately many of these workers may find that their house is not worth what they owe on it, or that it will take many months and months for their home to sell. This leaves them with several bad options to choose from.
Faced with selling their house for a loss or paying a mortgage for several months for house they are not living in some in this situation may consider renting their home. With the high rents that can be charged this may seem like an appealing option. The theory would be to rent the property until the house can be sold quickly for a profit or to hold onto it as an investment. One of the problems with this option is that being a landlord can be harder than you think, especially when you live in another State. Another problem is that this option means you are only one bad tenant away from financial problems. So unless you have a plan to pay the mortgage when the rent isn’t paid this may not be a good option. If a tenant doesn’t pay the rent and trashes your house before they leave you could be looking at thousands of dollars of repairs and months without rent.
Another option in this situation is proceed with a short sale. Along with all the other problems that a short sale entails one of the biggest problems is the possible tax consequences of forgiven debt if the short sale is approved by the lender. With the expiration of the mortgage debt forgiveness act at the end of 2013 debt forgiven as part of a short sale may be taxed as income unless the person qualifies for the Insolvency Exception or has obtained a discharge in bankruptcy.
Because of this Phantom Income problem and the other difficulties involved in a short sale it is important for anyone considering this option to assemble a team that includes a real estate agent experienced in dealing with short sales, a tax advisor and a bankruptcy lawyer. The bankruptcy is almost always the last thing that anyone in this situation wants to consider, but when the other options may involve paying for years on a house you no longer own, or having a problem with the IRS and the Comptroller of Maryland, it is an option you may need to at least consider.
For those who stay in Maryland they could also face financial issues unless they are able to quickly find a job that pays them as much or more than what they were making working for Beretta. Despite the rate of unemployment having dropped, finding a new job is still difficult, and even if a job is found may result in a cut in pay. For those facing a period of unemployment they may be faced with a difficult time keeping up with their bills. Faced with this situation it is a good idea to immediately contact creditors and let them know why you can’t pay your bills and see if they will put into a hardship or deferral program while you look for that new job.
If during a period of unemployment the person falls behind on their mortgage and bills they may be able to file a Chapter 13 Reorganization bankruptcy to help them get caught up on their bills and save their home. While such options are something to be avoided it is better to take the time to find out about these options and not need them rather then spending sleepless nights worrying about what you will do if things don’t work out. To help we are offering a free consultation for these residents of Southern Maryland.
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