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Richard, Attorney
Category: Legal
Satisfied Customers: 53675
Experience:  Attorney with 29 years of experience.
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Hi. I have a house that has been for sale for 4 years. I cant

Resolved Question:

Hi. I have a house that has been for sale for 4 years. I can't seem to sell it and I am about to lose my job at 60 years old. All that I have in savings is either in my company's 401k or in a retirement savings plan with a financial advisor (not a savings account#.

If I had to walk away from this house because I can't pay the mortgage anymore if I lose my job, can GMAC go after my retirement savings? The house is not under water. I owe 417k and it's appraised at $500k. I live in Connecticut.
Also, if I were to move to Florida and took money out of my retirement #knowing I'd pay taxes on it) and bought a small house in cash, would that house be at risk of being taken away because I walk away from the original house? Stressful times.
Submitted: 6 years ago.
Category: Legal
Expert:  Richard replied 6 years ago.

Good evening. You are in pretty good shape here. Your retirement savings (including your 401k and retirement savings plan) are exempt and beyond the reach of creditors. Also, your homestead that you would purchase in Florida would be beyond the reach of creditors. If you walked away, though, there would not be a deficiency because the amount owed is not likely to be in excess of the greater of the fair market value or the foreclosure sale price. Take care!



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Customer: replied 6 years ago.

How long would this stay on my credit? I have very good credit so it's such a shame to have to ruin it like this, but I can't see what else I can do. Is there any other option I can pursue...if I go to GMAC and talk to them, can I work a deal to remove myself from the house without having to "walk on it" or have it as a foreclosure? Are there any other options available to me? Thank you.

Expert:  Richard replied 6 years ago.

It would be a 100-150 point hit on your credit and would stay on for 7 years, but the impact would start being reduced as each month went by with that your only blemish. Given the fact that you are pretty much judgment proof and the fact that the value is equal to or in excess of the amount owed, you would have a good shot of negotiating a deed in lieu of foreclosure with your lender where you simply deed them the property in exchange for being released from the debt.


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