Posted on: 20th Jul, 2009 03:57 pm
i live in california and did not reaffirm my home loan in my chapter 7 bankruptcy. if i walk away from my house and do a deed in lieu of foreclosure, will that be seen in my credit reports? what is the procedure of getting a deed in lieu of foreclosure? if i am going to buy another house, and if the deed in lieu of foreclosure will affect my credit score, should i wait until i buy the second house before i do the deed in lieu of foreclosure on the first house?
Hi Laura,
Chapter 7 BK is the last option available to you. There are several reasons behind it such as :
Chapter 7 does not remove property lien due to secured debts (mortgage or car loan). So, even if you get a discharge, you'll have to pay off the lien in order to save your property from foreclosure or repossession.
Your credit score will go down by 250 points approx
It will take at least 2 years to qualify for an FHA loan and 4 years for a conventional mortgage at affordable rates of interest
Chapter 7 BK is the last option available to you. There are several reasons behind it such as :
Chapter 7 does not remove property lien due to secured debts (mortgage or car loan). So, even if you get a discharge, you'll have to pay off the lien in order to save your property from foreclosure or repossession.
Your credit score will go down by 250 points approx
It will take at least 2 years to qualify for an FHA loan and 4 years for a conventional mortgage at affordable rates of interest