In anticipation of a job loss, we need to cut back expenses. We are buying bare land in another state on a Land Sales Contract, 2 years in contract. I have notified seller that payments will cease in the near future. Selling property not an option. Seller says we will then be reported to collections and will have to deal with collections. (Ignore them?). What happens to our credit and credit score and for how long will this default follow us? Is the hit so hard we should go down in flames to hang on to property?
It will be 7 years before it drops off completely, and will be a fairly large hit to your credit score. Temp is right to go to creditboards, despite much evidence to the contrary on some days, this really is not a forum for deadbeats.
PolarDude
Senior Member - 1K
posted: Jun. 21, 2009 @ 4:46a
If it's an individual seller, you can have some leeway. They may not have much experience collecting dough, and you can clean your credit much easier than if it was a big bank. Consider yourself lucky.
urage
Addicted Member
posted: Jun. 21, 2009 @ 9:08a
Pay your bills deadbeat!
CreditGuy
Senior Member
posted: Jun. 21, 2009 @ 10:01a
What happens with a land contract default varies with the state in which it's filed and with its terms. Typically, the owner of the contract goes to court and gets a judgment. If you fail to pay the judgment within the specified period, you forfeit the land completely and still owe a money judgment if one was awarded. Often the owner just takes the land back and sells it to someone else.
You do understand that whatever payments you made on the contract will be gone? You don't own the property; you have no equity in the property; you get NOTHING even if the owner resells the property at once for more than you paid.
If that's the scenario, there will be a public record of the judgment against you and it will be a major negative on your credit reports for seven years--assuming it's picked up by the credit bureaus.
Dont buy bare land in another state when you dont have a secure income.
WalStMonky
Happy Member
posted: Jun. 21, 2009 @ 1:43p
Not likely at all that the will be reported. But read your contract, usually there's an out. The strategy is to sell for a large downpayment, collect payments until the contract holder defaults, lather rinse and repeat. Of course the owner wants as many payments as he can squeeze out of you. Call the owner's bluff I say. debtorboards.com is better than creditboards.
WalStMonky said: Not likely at all that the will be reported. But read your contract, usually there's an out. The strategy is to sell for a large downpayment, collect payments until the contract holder defaults, lather rinse and repeat.
Isnt this exactly what the current landowner is doing to the OP?
WalStMonky said: Indeed. I thought that was my point.
Sorry I thought you were suggesting thats what the OP could do with the land himself.
WalStMonky
Happy Member
posted: Jun. 21, 2009 @ 4:30p
OK, I can see now how you might have thought the way I worded my post. But your reading is actually one option for OP. Though to be fair it does take a certain skill set to do these land contracts, and is probably not a realistic prospect for an inexperienced person managing the property from out of state.
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