QUESTION
Should we see if we can get a deed in lieu to clear our names from the title?
Asked on Apr 18th, 2015 on Bankruptcy - Michigan
More details to this question:
Chapter 7 was discharged 12/30/2009, mortgage not reaffirmed. We stopped paying on house 10/2012 and now we want to move. Should we see if we can get a deed in lieu to clear our names from title? Also, a month ago I pulled my husband's credit and we saw lates on there from company that bought our mortgage after BK. Then today we got a collection letter from an attorney. My husband called them and they said they don't show our mortgage connected to a BK. Do we fax them a copy of our BK/discharge papers? We'd like to get our name off property but keep our credit good. We are post BK 5 years and don't want to wait an additional 3 years to apply for a loan (if they foreclose).
5 ANSWERS
Commercial & Bankruptcy Law Attorney serving Powell, OH
at
Ronald K. Nims
Update Your Profile
Yes, it's usually better to get a deed in lieu or a short sale (few lenders will do a deed in lieu unless you have had the house on the market to show that a short sale won't work). This avoids having a foreclosure on your credit history and avoids the liability from having a vacant house. Once you have informed the lender that the debt was discharged in a bankruptcy, it's the lender's responsibility to check it out not yours. Simply by informing them of your discharge, you've done everything which is required of you. You might need an attorney to work out the details of a short sale or deed in lieu. Many lenders will not deal with discharged borrowers to avoid any allegation of harassment.
Answered on Apr 22nd, 2015 at 6:01 AM
As you are now finding out, bankruptcy doesn't remove a mortgage lien nor does an intention to surrender get your name off of the title. However a deed in lieu is the worst possible solution to this problem due to the damage to your credit. Contact a local realtor that specializes in short sales instead.
Answered on Apr 21st, 2015 at 11:25 AM
A deed in lieu of foreclosure is probably not a bad solution, assuming the lien holder will cooperate. Pay an experienced attorney for one hour of their time to review the paperwork before you sign it. Now is the time to ask your questions, not after you have signed the documents. You don't want to some how re obligate yourself on the loan since you now have NO liability on the loan. Good luck!
Answered on Apr 21st, 2015 at 11:25 AM
Bankruptcy Attorney serving Madison, WI
at
Richard B. Jacobson & Associates, LLC
Update Your Profile
You should consult a skilled lawyer, since the answers to your questions are likely to depend heavily on specific facts. But in general, a deed-in-lieu is far less of a credit problem than a foreclosure. There is nothing wrong with sending a copy of your BR discharge to a credit or even though in theory it's up to them to check once you tell them that you have filed, or that their claim has been discharged. Good Luck.
Answered on Apr 21st, 2015 at 10:21 AM
Appellate Attorney serving Grosse Pointe Farms, MI
at
Musilli Brennan Associates, PLLC
Update Your Profile
You have a number of options, and the discharge should be effective the date of the judgment. You should confer with an attorney with the details.
Answered on Apr 21st, 2015 at 10:20 AM