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Posted: Thu Jan 07, 2010 6:13 pm Post subject: DIL, Foreclosure, Bankruptcy

I have moved out of my primary home in which I have an 80/20 mortgage on. I have not paid in about 5 months and during that time my mortgage was sold off to another company. That company has asked if I planned on keeping the property which I said no. They told me I could apply for a DIL to avoid foreclosure if I was approved. I live in Michigan and was wondering if this is a good option to take? What the tax effects would be? and I am planning on filing for bankruptcy soon but not sure of the best way to go about with any of this. Is it better to wait to file until after a DIL or Foreclosure or is it better to file before hand. I would like to be able to walk without having to pay for any of it and want to make sure that they don't come after me later for that property. Any help for this for Michigan is appreciated. Thank you!

smithsussane · Posted: Thu Jan 07, 2010 9:40 pm Post subject:

Hi Guest!

Welcome to forums!

It would be a good idea to go for a deed in lieu of foreclosure. It will help you get rid of the property and you would not be responsible for the deficient amount resulting from the sale of the property. As far as taxes are concerned, depending upon the Mortgage Debt Relief Act of your state, you won't have to pay the taxes on the forgiven amount. You haven't mentioned the reasons for filing bankruptcy however, if you wish you may file bankruptcy after the deed in lieu.

Feel free to ask if you've further queries.

Sussane

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DIL, Foreclosure, Bankruptcy