bankruptcy and deed in lieu

Guest 0.10 Dollars($)

I have already filed bankruptcy and been discharged, I kept my house however have not been able to continue to make the payments. I did not reaffirm and would like to know which would be better for me. Foreclosure or Deed-in-Lieu? Will either affect my credit as I have already filed bankruptcy? Will I owe the lender for anything? Property Taxes, Interest?

helping_user · Posted: Fri Jun 27, 2008 9:29 pm Post subject: RE: deed in lieu after bankruptcy

Welcome jocelynalexa.

I think you have filed bankruptcy chapter 7, is that so? how long have you been discharged? aren't all your debts discharged? or you mean you didn't include the mortgage in it? ok, then I think deed-in-lieu will be better considering that in such a process, lenders are not allowed to ask for the deficiency as per the laws. Also, I would like to know in which state you reside?

Thanks.

Niicss · Joined: 03 Oct 2005 Posts: 1033 153.96 Dollars($)

Welcome jocelynalexa.

You should request the mortgage company to accept the deed in lieu if you cannot pay the mortgage or don't want to have the property any more. If you face foreclosure then your credit will face similar damage but the mortgage company can come after you for the deficiency judgment.

Let me know if you have any more queries.

Guest 0.10 Dollars($)

I did file chapter 7 in NY and have been discharged for almost 2 years. This was included in my bankruptcy. Therefore I don't think they can come after me for any money. Since my credit report already says discharged for my mortgage, will they change it to report the DIL? Will it affect my credit report?

sara

Hi jocelynalexa,

Any debtor in chapter 7 bankruptcy can reaffirm the exempt part of the real property and retain property after chapter 7 discharge. So, if you had decided to keep the house, you should have paid the payments.

However, since you haven't been able to do so, the lender can call for a foreclosure. So, to avoid it, I suggest that you try for deed-in-lieu as because you can probably avoid paying a deficiency if your home sale price isn't enough to recover loan balance.

Take Care

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