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Dear Dr. Don,
Very recently, my husband passed away very suddenly. I’m awaiting approval of my application for disability pay. Unfortunately, my husband had no life insurance. Our condo could go into the foreclosure process in the next few months unless something changes. Survival is difficult right now. With medical bills in collections, will I have to find a lease option to buy? Two of my credit scores were fair and one was poor, but my record on paying the mortgage and car loans was perfect until now. Any suggestions on what I should do?

Thanks,
— Donna Denouement

Dear Donna,
I’m sorry for your loss. It sounds like it has caused emotional and financial pain. First, you should speak with a bankruptcy attorney about your options. Filing for bankruptcy could delay foreclosure and provide time for you to regroup.

Unfortunately, a bankruptcy filing will also make it more difficult for you to obtain a mortgage. Negative information remains on your credit report for seven years. In the case of a Chapter 7 bankruptcy filing, the period is 10 years.

You didn’t mention whether the medical bills were yours or your husband’s. If they were his, the attorney can also help you sort through whether you’re obligated to repay those debts.

There’s a question of whether to try to sell the condo before it goes into foreclosure. The attorney can take a look at the financial equation there, as well. I’m not sure how viable a lease purchase option is where you live. At some point, you must still obtain financing.

You haven’t told me enough about your pending disability claim for me to provide much advice there. You might require the help of a disability attorney in this area, too. Something that might help you is the prospect of back pay of disability benefits.

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