Housing Boom Debt: Son being led into debt beyond his ability to repay. Faces garnishee of salary, huge debt due on house speculation, mortgage on own home. What type of help should he seek and from whom. Also there is short delay made by contractor in the contract by builder. No key to house he is told he owns. Used financial provided recommended by builder.
Start with a lawyer. Your son needs to have all the legal documents he signed reviewed to see if there are any options to stop his losses. Your son should consult both a real estate, and perhaps bankruptcy attorney. He may need two separate specialist.
What does the house contract say? What do the loan documents say? Is there any way out of either? If the builder is under default there may be a way to get out of that contract. If that is feasible perhaps your son can cut his losses on that particular deal and try to get money back from the builder. However, if like many builders, there may be a separate legal entity (corporation or LLC) used for each property or small development. If that entity is having financial problems, getting your son's money back even if there is a provable default, may be practically impossible.
Once you are familiar with the legal status of all real estate and loan documents, the bankruptcy attorney can advise you whether bankruptcy is a viable option for your son. Not a pleasant or desirable thought, but one that may have to be considered.
If the situation is really bad it may not be advisable for you to bail out your son and jeopardize your financial well being at the same time. On the other hand, if the bankruptcy attorney believes that either bankruptcy is not a viable option, or that there is some reasonable hope of working out the debts, he or she can recommend a financial planner that can work with your son on organizing his finances, etc.
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