Bankruptcy: a Drastic Step but Sometimes the Wisest One

If you make mistakes, you might pay a high price. You might mess up the title to the property, which could haunt you.

A better idea is to pay a lawyer a couple of hundred dollars to transfer the title for you. You can also go to a title company and work with a closing or escrow agent.

We purchased our retirement home in September. We then put our present home up for sale. It's on the market for less than we owe and is priced about $10,000 less than others in the neighborhood.

We are retiring in October. If we go into foreclosure on our primary residence, can they put a lien on our new home? I'm sure we won't sell our current home by then, and when we retire we will not be able to afford two homes.

Do you have to retire in October? Unless this is a mandatory retirement, you and your spouse should not leave your jobs until you have sold your home.

If you stop paying the mortgage, the lender will put your property into foreclosure and that will trash your credit. In addition, if the lender allows you to do a "short sale," in which your home is worth less than the mortgage, and the lender does not agree to accept the amount from the sale to satisfy the debt, the lender can still go after you for the shortfall.

In other words, you will still owe the lender the missing money from the short sale or foreclosure, and you could continue to have legal troubles. That lender could sue you and put a lien on your new home, causing you a major financial headache in retirement.

Because you still have about six months until your planned retirement date, focus on doing what you can to get your home sold. You may need to make some minor changes or lower the price to make it even more attractive.

If you have done all that you can (including hiring a top-notch, aggressive agent), then you will need to find a way to keep bringing in income until conditions improve in your neighborhood.

If the real estate market does not improve in your area, you will have to approach the lender early about accepting a short sale as full payment of the amount you owe. You should also attempt to have the lender agree in writing not to report the short sale as a negative on your credit report. Instead, the loan should be reported "paid as agreed."

I am 63 and decided to buy my first house. I signed with a mortgage company. They promised me everything and told me I was approved for a certain amount of money.

I asked them if I could have that in writing, and they said they would send the form to me. I have since called and e-mailed. They continue to promise to send this approval document but have not sent it. I have been requesting it for almost two months now.