It happens all the time. I’m talking with someone about a legal issue – particularly when it comes to credit card debt and liability exposure on defaulted mortgages – and they say something to me that is 100%, without question, irrefutably – INCORRECT!
Example – one day I was in a group discussion and a person asked, “Can I be held liable on the deficiency if my house is foreclosed.” Before I could respond, the mortgage broker said, “No, Michigan is not a deficiency state.” This statement is 100% WRONG- Michigan is a deficiency state. In this situation, I had to scratch my head and pause for a second before responding because it was not my desire to insult the mortgage broker in the course of a casual conversation.
After the short pause (two seconds), I said, “Jerry – good news and bad. The good news is in a non-deficiency state, you’re correct. The bad news is Michigan is a deficiency state so you better let every person you have told that to, know that you’ve told them the 100% wrong thing.” Needless to say, Jerry wasn’t thrilled with my answer – but I had no choice.
The decision to “walk away,” “short sell” or ride it out on a home or rental property that is underwater is a MAJOR decision and it can only be made if you understand the exposure and the risk. Jerry, by speaking outside his expertise, in all likelihood injured people.
Another one – Jerry says, “You don’t have to pay your credit card debts – they will never sue you.” The answer is WRONG. More likely than not they will sue you – so you need to have a plan as to addressing the issue. The goal of eliminating the debt is the right goal – but the steps that need to be taken must be based on a complete knowledge of the legal issues, a risk assessment on the ability to settle, the availability of using bankruptcy as the primary or back up plan to eliminate the debt and the tax consequences. Unless the person knows all of these issues, he knows “nothing” and in my view, they should say nothing! There is no worse advice than bad advice!
In case you want good advice, you know where to find us. Whatever you do – turn Jerry’s volume to mute. Have a great week,