What to do with our under water home after chapter 7 bankruptcy?

The home should have been surrendered in the bankruptcy which would have not allowed for a "chink" in your credit soon after the BKY. I advise many of my clients to surrender their homes in BKY so that this very situation doesn't happen. You would be better off with a short sale if the lender will approve it. Also, it may honestly be a few years (with NO OTHER CREDIT DINGS) before you will qualify for another mortgage.

Yes, a short sale is more beneficial. You have no personal liability on these mortgages because you did not reaffirm them but if they foreclose, it will be on your credit report as a foreclosure. ?Doing a short sale will avoid this. Whether you can get another home immediately depends on whether you've maintained your credit since the bankruptcy. If you've made your payments on time and don't have an overload of debt, getting another loan should be easy.

Although if the foreclosure proceeds by notice only, it will not appear on your consumer credit report, it will appear on information about your credit to every future real estate lender. If the foreclosure proceeds by a judicial action, this public record will appear on your consumer credit report. In Nevada, a foreclosure can happen in one of two ways, but following notice requirements, or by filing an action in court. Until you know which way the wind blows, you can?t be entirely sure of how the foreclosure appears on your consumer credit. A short sale would be a lot less damaging to your credit than a foreclosure. As to obtaining financing for another real estate loan, lenders vary widely as to how much time must elapse between getting a new loan and a past problem, such as a bankruptcy, foreclosure or short sale. This is a question that needs to be asked from the lender, not a lawyer. However, in my experience, a local credit union may have the most favorable opportunities for you to obtain new financing.

Answering some of your questions requires a lot more information. You seem to be well-informed about the effect of a bankruptcy discharge on your mortgage note obligations. It has become the practice of most lenders not to send any information about payments made under a non-reaffirmed mortgage note, and there is not much to be done about that. I expect that a foreclosure would have a negative effect on your credit. A short sale might or might not have such an effect, but if it led to a negative report, you have the right to append a statement of up to 100 words explaining anything in the credit report, and you could use it. As between the two, a foreclosure is more likely to have adverse credit effects. But there is as third option, which you might have already attempted. This is a 'deed-in-lieu' of foreclosure. Basically you just reach an agreement with the lender that you are deeding them the property and you are walking away. The bankruptcy discharge protects you from a deficiency claim. Good Luck.

There is some disagreement as to whether a foreclosure can be reported on a credit history after the property has been surrendered and the associated debt has been discharged in a bankruptcy. In my opinion, it can be reported and it should be expected. However, again, there is disagreement. It may not be reported as a foreclosure on your credit history and there may be a way to contest the reporting if it is reported as foreclosure. Certainly, it can't hurt working with the credit bureaus in contesting/correcting the reporting. Pursuing a short sale may be one way of avoiding a foreclosure. Short sales are subject to the approval of the mortgage company or companies. You will want to contact your mortgage company and see what their requirements are for doing a short sale. Since it is difficult to predict exactly how the foreclosure will be reported on your credit history and how it will impact your credit, you may want to explore the short sale option and/or consider obtaining a mortgage for the new home prior to the foreclosure being reported.

A foreclosure is worse for your credit than a BK. It would be 4 years by most bank's policies before you would be considered for a new mortgage. You should be aware that a Supreme Court case is considering allowing unsecured seconds to be completely stripped in Chapter 7 as they can in Chapter 13. That might impact your case and you could file again in 2016.