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Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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I filed bankruptcy over one year ago and my mortgage lender

Customer Question

I filed bankruptcy over one year ago and my mortgage lender did not reaffirm my loan. My bankruptcy attorney said I could walk away and not owe the lender anything since they did not reaffirm the loan. Since my bankruptcy, my job position has changed and I can no longer afford my home. In fact, I have moved to another state so I no longer live there. The mortgage has changed hands 3 times since I took out the original loan. The new mortgage co want to do a deed in lieu of foreclosure. I'm not sure this is a good thing. They are saying my credit will take a big hit with a regular foreclosure. All 3 credit reporting agencies show my mortgage as being charged off. I did not get credit for any payments I made after my bankruptcy towards repairing my credit. Should I consider a deed in lieu or just go the foreclosure route?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 5 years ago.

So sorry to hear of your dilemna. I will strive to provide you with legal information to assist you.

I am a lawyer with 25 years experience. Although I am not your attorney, I hope that I can give you helpful legal information on this open and nonconfidential forum.

The chapter 7 bankruptcy would have discharged your personal liability on the mortgage but not the lien on the property. This means if the property were to go into foreclosure, the lender could sell the property to satisfy the debt but could not obtain a deficiency judgment against you for the unsatisfied portion of the mortgage.

That said, a deed in lieu of foreclosure may be in your best interest. By doing a deed in lieu of foreclosure you would avoid the potential for liability that could arise after the bankruptcy. For example, if someone were injured on the property you could be held liable

I hope that this helps.

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