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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 116790
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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I am retired and have a mortgage on property that is more

Customer Question

I am retired and have a mortgage on property that is more than the property is worth. In addition to the mortgage, I also pay the taxes and an HOA. I have considered just "walking away" but am concerned about the bank holding the mortgage being able to seize my assets, including my current home. I have had not luck with attempts to sell. No one even expresses and interest. If I stop paying the mortgage, what can happen to the rest of my assets - IRA's. annuities, pension, savings accounts?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Unfortunately, MO allows creditors to sue debtors for deficiency judgments in foreclosures. This means if you walk away and they take the house through foreclosure they will sell it at auction and if they cannot recover what you owe on the loan, they will sue you for deficiency and they could potentially seize other property and savings accounts. Social security, retirement funds, IRA are exempt from seizure or garnishment, but anything other than those funds can be taken.
If you cannot sell, then you need to try to negotiate a deed in lieu of foreclosure with the lender or a short sale and seek to avoid deficiency through the bank then agreeing to accept one of those methods of disposing of the house and forgiving the balance (which would be taxable income to you if they do so).
Other than those methods, if you walk away and they sue for deficiency, you can file bankruptcy (your retirement income can still be protected in bankruptcy) to seek to extinguish the deficiency claim.

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