What is the best way to go about a USDA Foreclosure?

We have about $15k in credit cards, $9k student loans, $145k mortgage debt on second house (first house we owe $90k and it MIGHT get $50-60k), next to no equity on second house, and two vehicle loans totaling around $6000-7000. What debts would be satisfied? What would you do? - you could file BKY and surrender the "rented" house in BKY and that lender couldn't assess a deficiency against you. You could discharge the credit card debt (in whole or in part, depending on if you had to file a chapter 7 or a chapter 13), reduce the car loans to the cars' worth (only if filing a chapter 13, AND if the debt was taken out NOT LESS THAN 910 days ago from the date of filing), and the student loans can NOT be discharged - PERIOD. That's a "quick" answer, but we'd have to take a look at the whole picture before deciding which course of action is best.

Student loans are not dischargeable in bankruptcy. All the other debts that you mentioned would be discharged in a Chapter 7 bankruptcy. If you want to keep the new house and the cars, you can generally reaffirm on the loans and continue to make the payments.?Based on the information you gave me, I would recommend a Chapter 7.

First of all, find an experienced bankruptcy lawyer, and do not rely for legal advice on mortgage agents or anyone who is not a lawyer. It is simply wrong to say that all government debt is excluded from the bankruptcy discharge: some is and some is not. Generally speaking, a deficiency on a mortgage note is dischargeable in BR, whether the lender is a government agency or a private bank or other lender. Student loan is not dischargeable unless you are very badly disabled: God forbid you should need that means of being rid of a fairly small loan. Unsecured credit card debt can be easily discharged. If the credit cards are store, rather than bank, cards, the creditor may hold a purchase-money lien on what you bought with the card, which means your lawyer will have to negotiate some settlement with them: usually it's easy to reach agreement on payment of a very small sum. The mere filing for BR should not ordinarily cause any problem between you and the bank lender, so long as you reaffirm the underlying note. Again, this can be complicated, which is why consulting someone who knows the field is needed. If you have no or small equity in your home, the Trustee will not be interested in it, and there will be nothing for creditors, so your ownership is not at all likely to be disturbed, so long as you meet the obligations of your mortgage and mortgage-note. Unless the vehicles are very valuable, you likely can reaffirm on them, or surrender one or both to the creditor. Again, a lawyer whom you can tell all the facts can explore the situation and help you reach the best outcome. But usually people keep their cars through a BR, if they want to do so. Good Luck.

Honestly, you should meet with an experienced BK lawyer face-to-face for legal advice. Any attorney worth his or her salt is going to charge you for a one hour meeting. But do not be "Penny Wise & Pound Foolish". Good luck!

The problem you will have with a foreclosure on a government loan is that without bankruptcy, you will be placed on the dreaded CAVRS blacklist and be ineligible for any type of government loans in the future as well as most other kinds of mortgage loans.

You should gather all your paperwork and sit down with a competent bankruptcy attorney in your area to discuss your options.