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dylatess, Attorney
Category: Bankruptcy Law
Satisfied Customers: 5142
Experience:  37 plus years of experience specializing in bankruptcy law
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My wife and I filed Chapter 7 bankruptcy in 2012 and all of

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My wife and I filed Chapter 7 bankruptcy in 2012 and all of our debts have been discharged. We've been continuing to pay our mortgage so the bank wouldn't foreclose, although we did NOT reaffirm the loan. The value of our home today is about 50% of the loan balance. Our bankruptcy attorney has told us that we have no liability to pay the mortgage loan or any deficiency after a foreclosure, and we can just walk away anytime. We are both 65 and recently retired and can no longer afford the mortgage payments, so we have decided to walk away and start a new life renting a home somewhere. My main question is...How long after we stop making mortgage payments will the bank foreclose and force us to move out? And is there any advantage to us agreeing to a "deed in lieu of foreclosure"? We could move out fairly quickly and it seems like a waste of money to make mortgage payments...why not just live here until the bank forces us out?

Over 34 years, I have assisted my clients with debt problems having filed more than 32000 Chapter 7 and Chapter 13 Bankruptcy petitions.


Your attorney is correct. Likewise, I tell my clients to stop paying and sit back. Note, once you stop all payments, in 90 days you will get a letter from the bank that they are beginning foreclosure proceedings. You then have another 90 days to work something out. If you do nothing, you will get a second letter telling you the date of the foreclosure sale. And if you do not move out by that date, the new owner has to go to court to file a formal eviction. So, depending how aggressive the bank is, it could take six months or longer before you have to move. Likewise, do NOT do a deed in lieu of foreclosure as this only benefits the bank saving them money and time. I wish you both well.

Customer: replied 3 years ago.

Thanks for your helpful reply. Our daughter and her husband are interested in purchasing our home if it goes to foreclosure. Is there any advantage to them if we did a deed in lieu or is the bank sale process the same?

The bank process is the same. But if they are interested, they should contact the bank directly. This will put them at the head of the line. I wish you well.
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