I'm in a bad situation.
I was a part of a business that failed. The business is gone, but I was the personal guarantor for some equipment and the creditor got a judgment against me personally for $400,000.
I received notice today that the creditor is planning to have my personal home sold at auction to enforce the judgment.
I have an existing 1st mortgage on the house with a balance of $240,000. I am current on all payments. I also have a second mortgage with a balance of $48,000. I am current on all 2nd mortgage payments, too.
Another lingering problem of the failed business is that our CFO talked me into pledging my home as collateral for a business line of credit. Now that the business is gone, I am responsible for the $500,000 line of credit. I am not current on the interest only payments on the $500k. The line of credit is 3rd in line.
My home has a 2005 appraisal of $677k. That was at the height of the real estate market. Nothing in our neighborhood has sold in over a year, and there are only a few other homes in the neighborhood that are worth as much as ours.
Am I correct in assuming that the company that obtained the judgment is 4th in line? Do they have to totally pay off the 1st ($240k), the 2nd ($48k), and the business line ($500k) -- a total of almost $800k -- before they can take the property?
Since the property is probably worth less today than it was in 2005, what's realistically going to happen?