Overhaulin'

if our house is being foreclosed, can they take our retirement or make us sell our cars?

we both have 2006 cars that are paid off. Can they take our cars or make us sell them to pay them some money? Can they place a judgement to take our retirement 401k?

Public Comments

1. NO
2. Man, are your priorities in order or what? Why the hell would you have 2- 2006 cars that are paid off and be that far behind in your mortgage payments? \ Yes, they can get a default judgement to sell your assets to payoff any payments which are in default, then kiss your paid up 2006 cars good bye. Do you have a lawyer??Believe me, you need one.
3. Once the foreclosure is complete and the mortgage co or bank resells the property, if it sells for less than you owe and the mortgage company forgives the balance, that balance is seen by the IRS as income and you have to pay taxes on it. if you don't or can't, the irs will/can take anything and everything you have! The IRS is the most powerful dept. in the fed govt. also the most unconstitutional!
4. Your mortgage company would never know about your cars unless you let them and could not force you to sell them without a judgement. Your retirement should be safe also. However, If you file bankruptcy the trustee will force you to sell your cars but shouldnt touch your retirement (very few exceptions).
5. If you end up with a judgment for a deficiency balance, that judgment can be attached to any asset you have. Your retirement account may have some protection, but that is a question you have to ask the people holding your account. Why didn't you pay your house payment before you paid off the cars? That was pretty dumb.
6. Depends upon the law in your state, and whether the loans you have are subject to recourse. Here in California, purchase money loans are not subject to recourse. Providing you don't commit fraud or any of the other things that void this protection, once they take the property, that's it. They cannot win a deficiency judgment (or shouldn't be able to). If, as I suspect, you "cashed out" to pay for those cars, then you've likely got a full recourse loan, and they can pursue a deficiency judgment. Once they've got that, talk to a lawyer about whether they can get court approval to take your vehicles. More on recourse versus non-recourse here: www.danmelson.com/2006/12/recourse-loans-and-nonrecourse.html Retirement accounts are protected assets, and while I suppose it's possible to get at them, I've never heard of a case of them being successful, at least not until you start withdrawing from those accounts. The money you withdraw is ordinary income, and therefore, fair game.