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Mortgage With Bad Credit Case Scenario
Letter of Explanation: Medical Hardship & Bankruptcy Dismissal
​Date: October 19, 2026
To: Mortgage Loan Underwriting Department
From: Potential Borrowers
Property Address: Beech Island, SC 29842
​Subject: Statement of Extenuating Medical Circumstances & Financial History
​To Whom It May Concern,
​We are submitting this letter to explain the background behind our Chapter 13 bankruptcy dismissal, our current household income, and the reporting status of our mortgage.
​1. Consecutive Emergency Medical Hardships & Bankruptcy Dismissal
In 2022, we purchased our home at 302 Dicks Drive, contributing a $90,000.00 down payment. Following employment changes within the Department of Corrections system, we experienced temporary delays in housing payments and entered Chapter 13 bankruptcy protection.
​Our ability to fulfill the Chapter 13 plan was interrupted by two severe, life-threatening medical emergencies in late 2025:
​October 2025 (Severe Kidney Infection & Septic Shock): Donna suffered a severe, life-threatening kidney infection resulting in septic shock and high fever. Emergency medical transport brought her to the hospital, where doctors discovered large kidney stones blocking urine flow. Surgeons performed an emergency procedure placing a nephrostomy catheter directly into her back to drain the infection. Following discharge, she underwent outpatient laser surgery with her urologist, Dr. Mack, to break up the stones.
​December 2025 (Heart Attack & Open-Heart Surgery): Just one week and one day after returning to work, Donna suffered a heart attack on December 15, 2025. She was transported by ambulance to the hospital, remaining inpatient through December 26, 2025. During this admission, on December 22, 2025, she underwent major open-heart surgery.
​2. Exhaustion of Leave & Community/Foundation Support
During this extended medical crisis:
​Donna completely exhausted all earned annual leave and sick leave while unable to work.
​To manage essential living costs while waiting on disability and retirement claims, we sought help through available support systems:
​Correctional Officers Foundation: Provided charitable financial assistance toward core household expenses.
​Coworker Support: Donna’s workplace organized a collection drive to help cover immediate living expenses.
​Community Utility & Food Assistance: We utilized local community outreach programs for help covering basic electric, water, and food expenses.
​Despite taking these proactive steps and exhausting personal resources, the temporary loss of active regular income made it impossible to maintain the Chapter 13 plan payments. This direct medical hardship resulted in the dismissal of our Chapter 13 plan on April 2, 2026.
​(Note: Formal medical record requests have been submitted to Dr. Mack’s third-party record processor and will be forwarded upon receipt.)
​3. Servicing Status of Current Mortgage
Our current mortgage is a private investor portfolio loan serviced through Chris Lathsbury at Home Spring Mortgage. As a portfolio loan, the servicer does not report monthly activity to national credit bureaus. Verified payment history can be documented directly through bank records and servicer verification upon request.
​4. Current Household Income & Financial Stability
Our household finances have fully stabilized with permanent, ongoing income sources:
​Todd Guerrier: $5,000.00 / month (Utility Worker, City of Lexington County)
​Donna S. James:
​Social Security Retirement: $1,349.00 / month
​Police Officers Retirement System Pension: $940.62 / month
​Long-Term Disability (The Standard / State of SC): $800.00 / month
​Total Household Income: $8,089.62 / month
​With predictable retirement and disability benefits in place alongside Todd’s full-time employment income, we are fully capable of maintaining all future mortgage and living obligations without disruption.
​Sincerely,
​Raul and Dianne Gutierrez
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