I received a letter stating my home goes up for auction in Feb 2017. I own my home,it's paid off. I was in a bad place a few years back and am just now starting to make a little money. ($1000-$2000 monthly) I owe $15,000 but can't afford that all at once . I don't know what to do. Can anybody help me figure this out before I lose my house, please?


If, as you say, "it's paid off", you have collateral to borrow against. Go to the bank that held the mortgage, and get another one. Of course you must prove that there are no prior liens on the property, but that's where I'd start.


When in a situation like this, you'll need to start working a variety of different options all at once - immediately - to give yourself the best chance of a speedy recovery. You'll likely need to fill all your spare time chasing down a variety of potential leads, but soon the situation will be over. I've been there - push through and you'll come out the other side, one way or another. I'll suggest a variety of tactics that could work in a situation such as this.

Especially with some income now, getting a loan to cover the taxes - especially if the home is worth more than $30k (less than 50% loan-to-value loans are much less risky for the lender) - is probably the best bet to give you more room to work (pay off the tax burden and give you payments over time to pay off the balance). However, given the rather "emergency" nature of this situation and the timing, you'll need to start talking with people right away to see if there is an option that fits you. Make things clear: you have income now, but you have $X amount of taxes owed and they are threatening to sale by a certain date - is there something we can work out? I mention banks, credit unions, and mortgage brokers because all have different requirements and can help in a variety of ways. The main advantage of a mortgage broker in this situation is they will be more likely to have access to "hard money lenders", which are lenders of last resort - go there only if all else fails and you qualify for nothing else. You're biggest advantage is having a house that is paid off, and should be worth well more than what is owed on it.

While making appointments to talk with banks/credit unions/mortgage brokers to see about getting a low loan-to-value mortgage or home equity line of credit (HELOC), I'd also check with your local government about requesting an extension, as you have income now and are trying to get back on your feet. You should be able to show ability to pay, but over time - so that's a potential option. However, especially if this is in a late stage and depending on where you live, government agencies aren't always the most helpful or forgiving if too many deadlines have passed. If you are polite and persistent and stay calm they can surprise you pleasantly, but you can't really depend on that. Still, it's worth a try. Ask about payment plans, extensions to allow you to arrange a mortgage on the property to pay the tax bill, and "any other option they might be aware of". You have things to offer, you just need to find the right combination of factors to satisfy everyone's requirements.

The third avenue is to request a consultation with a lawyer in your area about your situation. Lawyers specializing in real estate, bankruptcy, and foreclosure are all especially likely to be able to give some reasonable advice, but general practice attorneys (if you live in a small town without lots of specialists nearby) can still be helpful. Most lawyers will offer an initial free consultation, sometimes even just over the phone with a paralegal, and this can be very helpful.

The fourth option, and will require a real lawyers advice or extensive legal research on your part (and preferably still a real lawyers advice), is a legal tactic such as bankruptcy. If you qualify, a bankruptcy could initiate an automatic stay (see linked article for more) which would temporarily halt the tax sale until bankruptcy proceedings determine how the debts should be handled, but whether or not this could apply to you is going to depend on a variety of personal and local factors that are too complicated to determine here. Depending on your other debts and assets a bankruptcy might even be a good option for you, even if it doesn't eliminate the tax debt (it usually doesn't, but can still delay the sale to give you time to work if all else fails). However getting something like a mortgage to pay off the tax debt, if you still need to do that, could be greatly challenged by being in the middle of a bankruptcy, so please take this advice as a "this is something you should look into further, carefully" - not something to jump to doing without careful consideration.

The fifth option is to check with local charities and agencies. I'm not aware of any big nation-wide ones, but most communities have some general purpose "help people out who have fallen on hard times" organizations that can apply to you. Some offer consulting from professionals working without fee, and sometimes they just know about a variety of special options and funds that could help you. Some organizations will try to help anyone, and some can refer you to organizations that could be more specifically helpful due to age, disability, whether or not you have kids, marital status, if you qualify for other government aid, etc. You won't really know until you try.

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