My question involves judgment recovery in the State of: CA
We have a $500k judgment from an insurance company and have been advised to stop making our mortgage payment to demonstrate that we don't have the cash (which we don't). We are currently paying the mortgage out of our Roth IRA.
The objective of this strategy (as we've been advised) is to negotiate a settlement of much less. We have around $2 million in real estate holdings, which is untouchable in this housing market.
1) Should we do this and risk what will it do to my and my spouse's credit rating of 800+?
2) What could/should be anticipated as a settlement amount?