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 p70816h
Joined: 30 May 2009
Posts: 1
1.47 Dollars($)
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 Posted: Sat May 30, 2009 11:06 am Post subject: How can I get out of mortgage after Chapter 7 discharge |
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Wife and I filed for Chapter 7 and were discharged 8/08. Mortgage was in wife's name and put under the exempt section in papers. We have continued to pay for mortgage, credit report shows "included in BK" with $0 payment amount and $0 balance.
Now for the dilemma, we have found a new home made the offer and was accepted. (Qualified under my credit score of 675) wife's is still low 611. New mortgage will be in my (husbands) name but other home has not had much luck selling. Asked for loan modification to lower payment and interest rate and to change ARM to fixed with a big fat "NO" from the mortgage company. If we could of got the loan modification we may have rented or leased the home until the market improved.
So, what are the consequences of letting them foreclose on that home? How would that affect her credit? Are we or would we be still liable for that mortgage after the discharge has already taken place? Any other suggestions of selling and/or getting out of that first home would be greatly appreciated. |
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jenkin7
Joined: 04 Jun 2007
Posts: 3429
Location: Hawaii
514.13 Dollars($)
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| Posted: Mon Jun 01, 2009 12:27 am Post subject: |
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Hi p,
The bankruptcy discharge will not release you from the mortgage. You will have to reaffirm the mortgage and make payments if you want to keep the house. If you stop payments and the house goes into foreclosure, your wife's credit will be affected as she is the only on the loan. Your credit should be safe in this situation. Instead of a regular foreclosure, you can go for a deed in lieu as it will be a little bit less damaging on your wife's credit. |
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Jessica
Community Mentor
Joined: 08 Jun 2004
Posts: 814
Location: OHIO
195.97 Dollars($)
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| Posted: Mon Jun 01, 2009 6:13 am Post subject: |
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Hi guest,
You mean your credit score is 675 after the discharge from bankruptcy. Well that's a pretty good one. But did you sign a reaffirmation agreement after you received the discharge order. It's essential to sign such an agreement before you start making payments again on the mortgage. By the way, the other home is on the market for a while and you're unable to find a suitable buyer. That means you still have unpaid mortgage debt. But how does your credit report show $0 balance on the mortgage?
I don't think you should allow the previous lender to foreclose on your home. It is most likely that your current lender won't offer you the mortgage once he's aware of the foreclosure. Moreover, your credit score will drop down further.
| Quote: | | Are we or would we be still liable for that mortgage after the discharge has already taken place? |
Well, the bankruptcy discharge relieves you from any personal liability towards the mortgage included in the BK. But the lien on the property remains thereby giving the lender a reason to foreclose on your property. So, in order to save your credit, you need to pay off the loan in full.
What I would suggest is, offer the house on lease and use the rental payments to make the mortgage payments. Do you think the rental income would be sufficient enough to help compensate your loan payments?
Regards,
Jessica
_________________
http://jessica.mortgagefit.com/ |
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Hello
Guest
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| Posted: Thu Jun 11, 2009 7:02 am Post subject: |
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| Walking away from home now will do nothing to your credit. They cannot report the foreclosure if you did not reaffirm!! That MUST be listed on your credit report as part of the bankruptcy by law. If they add anything to your credit report about foreclosure after your debt discharge, contact the credit bureau demanding removal. I would get a lawyer to get compensation for the damage they did to your credit. |
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