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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I am still living in primary residence but it was included

Resolved Question:

I am still living in primary residence but it was included in ch7 bankruptcy. It was discharged in 2009. I have been current with payments but now I need to move on. Would it benefit me to use the deed in lieu of foreclosure or just let it foreclose. The house is about 75k upside down. I am trying to lessen the blow to my credit which I have been successful at rebuilding. Which is better for me when it comes time to try getting a mortgage.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.
Hi JACustomer,
Whether you allow your house to foreclose or to do a deed-in-lieu of foreclosure will not make much - if any - difference in when applying for another mortgage. The reason is the new mortgage company will not know anything about your current mortgage except for the fact that is was discharged in a Bankruptcy, as no further information regarding your current mortgage - either positive or negative - past your Bankruptcy can be entered on your credit report.

I think this is what you wanted to know. If not, please let me know.
Thank you.
cfortunato and other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 years ago.
So if I have a foreclosure doesn't if still show in public record? What do I say to mortgage company if I ever had foreclosure? I started just trying to research how long I need to wait but it seems there are no real answers. And when a company says x time from foreclosure when does the clock start from discharge date or public record date
Expert:  cfortunato replied 5 years ago.

A Bankruptcy on one's credit report is considered to be the worst thing that can be there. The fact that there is a Bankruptcy will overshadow a subsequent foreclosure or deed-in-lieu.

However, if there were no Bankruptcy on one's credit report, it would not make a difference to a new mortgage company if one had a foreclosure or a deed-in-lieu of foreclosure, as both signify not having paid the mortgage, as it is not possible to do a deed-in-lieu if one is current with the mortgage payments.