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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Hello, I was discharged for a BK a year ago We did not reaffirm

Customer Question

Hello, I was discharged for a BK a year ago We did not reaffirm our mortgage. I contacted our bank PNC Bank and I am not personally liable on the promissory note associated with our mortgage. I would like to walk away, but i do not want the mortgage company to report a foreclosure on my credit report if I do walk away, since it was already discharged in the the BK. So, can I walk away and have it not affect my credit score?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 6 years ago.
Hi JACustomer,
Once a debt is discharged in a Bankruptcy, there can be no further information concerning that debt on one's credit report.
This means the mortgage company cannot list any further information - including a foreclosure on your credit report. The only thing that can be listed on your credit report is the Bankruptcy, not a foreclosure.
(The reason is that listing any further activity is considered to be a form of an attempt to collect that debt - which is prohibited because of the Bankruptcy.)

I think this is what you wanted to know. If not, please let me know.
Thank you!
Customer: replied 6 years ago.



I am pleased of this information, but i am seeing on the internet multiple places were: they are saying that it will report the foreclosure on your credit score.


Example 1)

Though your bankruptcy was discharged, still the lender has the right to collect the mortgage dues from you. If you walkaway from the property, the lender will have the right to foreclose the property. The foreclosure will also badly affect your credit and will lower your credit score by 250 points.


Example 2)

Even if the debt was discharged, and you don't owe the money, the fact is that you didn't make payments and they had to foreclose to take legal title to the property. You might get them to stop reporting it by complaining often enough, but legally they are right. The bankruptcy just stopped them from being able to collect the debt.


Now, we owe alot more then what this house is worth, and it would be best if we could walk away. But we want to be able to buy a house in a year or so, and from what I see you have to wait 2 years after BK, but if a foreclosure is added on to my credit report then it will not happen. I need to make sure I am making the write choice,

Expert:  cfortunato replied 6 years ago.
After a debt is discharged in a Bankruptcy, it is absolutely forbidden for a subsequent foreclosure or short sale to go on one's credit report. Anything you might read indicating otherwise is wrong.
If a foreclosure is inadvertently put on your credit report, the credit bureaus must remove the foreclosure if you bring it to their attention.
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