terrified and the possibility of having to file bankruptucy

[GIacona]

What is the name of your state (only U.S. law)? NJ

behind in payments and there is no way I can keep it. There is an offer on the property which will pay off most of the 1st mortgage however there is a 2nd mortgage as well.

I have an attorney that specializes in short sales and foreclosure who only practices real estate handling this sale. I have been told the 2nd lien holder is going to get a very small amount and release the lien. If they do not during foreclosure they get 0 so they really have no choice.

However some lenders are requiring promissory notes for differences and some are not depending on the situation. I have been told the first lender will send me a 1099 and not purse a deficiency judgment. If I am sent a 1099 I will have to pay tax and they write off the difference and cannot sue for it.

Anyways the 2nd lender is owed about 35K the lawyer thinks he can negotiate to pay them down a substational amount lower then what is owed over 5 or 10 years at 0 interest. Does that seem possible? Does anyone know if debt negotiation works? I’d rather have marked up credit than a bankruptcy. However if that’s not possible and they do come after me for the full amount I may have no choice but to file bankruptcy.

I refuse to file on false pretenses. I will only file if forced into it by getting sued by one of these banks. I am currently cleaning up some other debt.

Bankruptcy scares me because the line of work I am in, I change jobs frequently sometimes every 2-3 years. My job has nothing to do with finances but I have and may work again for a bank or financial firm, but do not handle money as one of my job duties. But who knows what the future holds for me if I will stay in this career or change down the road.

I also want to be able to buy a home again in the future and know it's going to effect that. I mad a promise to myself once this mess is cleaned up never to borrow money again unless it's for a home. I am following the Dave Ramsey plan. No credit cards, no loans etc, only for mortgage. I will also need credit to get an apartment.

if anyone has any input on my situation I would appreciate any advice.