QUESTION
If we did not reaffirm on mortgage after filing Chapter 7 Bankruptcy, can we walk away from the mortgage?
Asked on Jul 13th, 2012 on Bankruptcy - New Jersey
More details to this question:
After filling Chapter 7 Bankruptcy in 2009 we did not reaffirm our mortgage, and kept living in the house by making the monthly payments. This is 2012 and we would like to know if we can just stop paying on the house and walk away from this mortgage? Would we get garnished or be in legal trouble for doing that? If not, how long, more or less, do we have to live in the house without making any payments?
19 ANSWERS
Yes, you can walk away at any time if you did not reaffirm.
Also, the house still must be foreclosed on before you could be forced to move out- so you still have many months available to live there without making payments.
Answered on Aug 15th, 2012 at 12:09 PM
Burton J. Green
If you did not reaffirm the mortgage debt the lender cannot come after you if you stop paying the mortgage. The lender can file foreclosure in order to have the house sold.
You can continue to live in the house until the house is sold at the foreclosure sale.
Be aware that if there are homeowner or condo fees being assessed, you are still liable for such fees owing after the date that you filed until title to the home is out of your name.
Answered on Aug 15th, 2012 at 12:09 PM
Commercial Bankruptcy Attorney serving Davie, FL
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Law Office of Jeffrey Solomon
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Yes, you can walk away and not owe the mortgage a dime. A foreclosure in Florida can take a long time.
Answered on Aug 14th, 2012 at 1:39 PM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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Your personal liability has been discharged in the chapter 7. You do not owe anything but the lender has its security interest in the property and can foreclose. The foreclosure process takes a minimum of 110 days. You can live there until the completion of the foreclosure. After the foreclosure you will not be garnished or have legal trouble for having stayed there rent free.
Answered on Aug 13th, 2012 at 6:56 PM
You can make arrangements with the bank for voluntary surrender and simply "walk away" from the mortgage without needing to worry anymore about it.
Answered on Aug 13th, 2012 at 5:35 PM
As you did not reaffirm your mortgage, technically you no longer have the debt. However, it's a good idea to contact the lender to see if you are able to short sale the property. Just walking away is the worst thing you can do. If you are able to short sell the property, make sure you will not be liable for a deficiency (the difference between what you owe and what the property eventually sells for). As you don' really have the debt any longer because it was eliminated in the bankruptcy, you should be able to do this. You will have to list the house in order to short sale it - make sure you find a Realtor who is experienced in short sales. Also, ask the lender for "cash for keys." If they agree and you leave the house in "broom swept" condition (not pristine but no trash or damage), you may receive $1,000 or more to help you with the eventual move.
Answered on Aug 13th, 2012 at 4:07 PM
Yes. You could walk away from the first mortgage whether or not you filed bankruptcy.
Answered on Aug 13th, 2012 at 3:43 PM
General Practice Attorney serving Crystal Lake, IL
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Bruning & Associates, P.C.
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If what you say is true and you have not reaffirmed the mortgage, or done anything else to resume personal liability on the loan (e.g. refinancing or something like that), you should be able to walk away from the mortgage without concern of a deficiency judgment being levied against you if you received a discharge in your Chapter 7 case. The length of time you have in your home varies greatly depending on your bank and the law firm the bank has hired to do the foreclosure suit; an experienced foreclosure defense attorney may be able to extend the time you have in your home for a reasonable fee well below what you would save in the time period it takes for the foreclosure to finish. Often, though, the process will take between nine months to a year in Illinois without interference.
Answered on Aug 13th, 2012 at 3:32 PM
Bankruptcy Attorney serving Cleveland, OH
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Benson Law Firm
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Generally speaking, a personal obligation on a mortgage loan is discharged in Chapter 7 unless the debt is reaffirmed.
Answered on Aug 13th, 2012 at 3:31 PM
3 Awards
Generally speaking, when a debtor does not reaffirm on a loan and that loan is discharged in bankruptcy, a debtor may continue to make payments to avoid foreclosure or repossession. If the debtor later decides to stop paying, they are not subject to a contract. A debtor could, for example, let a home go to foreclosure post-bankruptcy. The debtor would not have any liability on the discharged home loan. For specific legal advice, I suggest you meet with a bankruptcy attorney who can review your situation in its entirety.
Answered on Aug 13th, 2012 at 3:25 PM
If the loan was discharged in the bankruptcy... then you can walk away from the house. They can foreclose on the house... but they cannot chase you for any deficiency.
Answered on Aug 13th, 2012 at 2:39 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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You are fine so long as you did not reaffirm the debt(s) on your home. Make sure to keep any HOA current until the house is foreclosed. This foreclosure could take several months to a few years, there is no way of predicting. My best to you.
Answered on Aug 13th, 2012 at 2:31 PM
Bankruptcy Attorney serving Grand Rapids, MI
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David Andersen & Associates, PC
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Yes, you can discontinue payments without any personal liability. Remember, you get a 6-month redemption period from the foreclosure sale before you have to move out.
Answered on Aug 13th, 2012 at 2:29 PM
Criminal Law Attorney serving Fremont, CA
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Steven J. Alpers, A Professional Corporation
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I can only tell you that the mortgage company would have to give you a 90 day notice and then a 20 day notice before the sale of your house. Maybe you should consider talking to an agent, maybe the one who helped you buy the house, to see about the possibility of a short sale. The mortgage company cannot go after you personally, the took the house and land as security for their loan so they could only take the house and sell it. By the way if you can do a short sale you should be able to get at least $3,000 for moving expenses.
Answered on Aug 13th, 2012 at 2:29 PM
Estate Planning/ Probate/ Wills Attorney serving Kent, WA
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John A. Ferguell, P.S
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If it is a first mortgage, the bank's only recourse is to foreclose if they do it non judicially. This is the typical route. You may be able to stay in the house for a year or more as even a fast foreclosure process takes a year. They can't come after you for any deficiency on a first mortgage.
Answered on Aug 13th, 2012 at 2:17 PM
Criminal Defense Attorney serving Calabasas, CA
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Law Office of Bernal P. Ojeda
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You can walk away but you need to surrender the house.
Answered on Aug 13th, 2012 at 2:16 PM
Alternative Dispute Resolution Attorney serving Ventura, CA
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Zahn Law Office
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You can walk away from the house without penalty.
Answered on Aug 13th, 2012 at 2:16 PM
Criminal Defense Attorney serving Deltona, FL
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R. Jason de Groot, P.A.
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If you did not reaffirm the mortgage, that particular debt is forgiven and you can walk away. You could have many months in the home before foreclosure procedings are filed.
Answered on Aug 13th, 2012 at 2:16 PM
Bankruptcy Law Attorney serving Livingston, NJ
Partner at
Law Office of Stuart M. Nachbar, P.C.
2 Awards
If you did not reaffirm, yes you can walk away and they can foreclose on the Property. Your personal obligation on the Mtg would not be effect as the bankruptcy would have discharged it. You would probably have about a year in the property.
Answered on Aug 06th, 2012 at 3:02 PM