Partnership Story

In 2004 I made a deal where I basically traded half of the future equity in my home for 10 years of house payments. The house was worth $1m and I owed $500k. The deal was that I would sign the house over to Bob, he'd then refinance it for $600k, pay off the first loan, and I'd take the $100k cash, which left me with $400k equity, then he'd signed the house back over to US, as tenants in common.

He was to make the payments for 10 years and after 10 years we'd sell the house, pay closing cost, commissions, the loan, then I'd get my original $400k, he'd get paid back for all the payments in full... we'd and split the balance 50/50.

It seemed like a pretty good deal at the time and the projection was that after the 10 years, we'd each walk away with a few hundred thousand dollars.

Everything was going smoothly for about 4 years, then he decided he wanted out. He simply quit paying the mortgage and didn't tell me and it wasn't until the house was $30k in arrears and already in foreclosure that I found out about it.

Since the note was in his name the bank wouldn't even talk to me and it's been an uphill battle from there. The only way to stop the auction was to either come up with the arrears, which I couldn't do, or file bankruptcy. So, I filed Chapter 11, which would allow me to reorganize.

The problem was I didn't have the money for an attorney and didn't have a clue as to what I was doing, as Chapter 11 is quite difficult. So difficult that they dismissed my bk case in Jan, and by Feb the house was scheduled for auction again.

Again, in Feb I filed bk to stop that auction, however, not knowing this, the trustee company sold the house back to the bank.... they then tried to evict me, sent the cash for keys people twice, and when all of that was ignored we finally ended up in court.

After discovering I had filed a second bankruptcy they dismissed the eviction and waited. Then, once again, my bk was dismissed for non compliance and it was ordered that I get an attorney in order to reinstate my chapter 11 bk. Meanwhile Bob signed the house over to me 100% and as it turns out he had taken an additional loan against my property through his girlfriend (against the terms of our agreement) and filed a $300k claim against my bk. The house, for the third time was scheduled for auction on August 28th.

Without the money for an attorney, it wasn't looking good. Then out of the blue.. somebody who had been to the house a couple of years ago came to me wanting to rent it out. Not really knowing how the whole thing was going to play out, we started discussing the idea. When we signed the deal, they gave me a $5k deposit, which coincidentally was exactly the amount the bankruptcy attorney wanted for a retainer. So, I took the money and hired an attorney.

The attorney, his assistant and I worked around the clock for 3 straight days to get all the paperwork that I needed filed with the court and also file a motion for an emergency bankruptcy hearing. The auction was scheduled for noon on Friday the 28th, we were granted a hearing set for 10:15 am, less than 2 hours before the auction.

Had I not been granted the reinstatement, I would have lost the deposit money and everything I've worked for my entire life. It was my only shot. Luckily I was granted a reinstatement, which in turn also put back in place the automatic stay protecting my house from foreclosure. Phew!

Then, I had to scramble, as the people moving in originally wanted to move in on the 22nd, but since I had a big party scheduled for Labor Day weekend I pushed it back until after the party. I needed the party so I could have money to move with, and only had a week to get as many people to the party as I could. But was also supposed to have found a place, packed and moved the morning after the party.

I focused on the party and looked for houses at the same time. Finding one was much more difficult that I thought, mostly because I have been self employed for 15 years and have filed 2 bankruptcies in the last 6 months. Nobody would rent to me. Plus, the bk court has forced me to close all of my credit cards and checking account and I looked like a total loser on paper. It really sucks, but it is what it is.

I ended up taking an extra week, and they were kind enough to not force me out of my house and into the street which is what it was looking like for a while there, but at last I managed to wiggle my way into the house I'm in now... We're at Ray and McClintock and my kids love the new house, mainly because the diving board has two springs and is really bouncy and the pool is about 10 feet deep.

Like I said it has been a long hard battle. All I ever wanted was for the bank to talk to me and for us to come to some sort of terms on the remaining balance considering it's about half of what the properties are worth, even in today's market.

I honestly think that most people would have given up and just walked away and there were times when I wanted to do just that. But I didn't and now it's time to sell the house.

Taking care of that property alone hasn't been easy to say the very least and occassionally I've had help from friends, but for most of the last 9 years it's just been me. Most people have no concept of what it takes to maintain a property like that, not to mention the money it required, on an average it was about $8k a month to keep everything going and when I couldn't do that it suffered and it showed.

Then you add in the burglery, the big flood, the reconstruction, my dad's daily cancer treatments, and then when he died, not to mention all the while raising 3 teenage sons - pretty much all on my own, with no child support, no almony, or spousal support, and no other income than what I was able to bring in here and there, it's been an overwhelming responsibility.

It's been a full time job x 10, but now without that overwhelming responsibility I can move on and get back into the mainstream of a normal life. Time to get settled, get a job and get my life back.