QUESTION
Would my husband have to start building credit all over again? Would we ever be able to obtain another mortgage?
Asked on May 28th, 2013 on Bankruptcy - Florida
More details to this question:
Due to a bad business deal, my husband filed for bankruptcy over three years ago. I did not file. Our mortgage was not reaffirmed after the bankruptcy. We are currently receiving mortgage statements that say For Informational Purposes Only. They say the mortgage was charged off. My husband’s credit report is showing as a zero balance owed. My credit report still says I owe the balance, but the mortgage has stopped reporting to the credit bureau. Now we can no longer afford the home and owe substantially more than it is worth. What would the consequences be of walking away from the home or letting it go into foreclosure? I currently have excellent credit. How would it be impacted?
8 ANSWERS
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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You are still liable for the entire mortgage, he is not.
Answered on Jun 05th, 2013 at 4:57 PM
William A. Siebert
Your credit could be adversely affected by simply walking away, You might consider offering the house (a "deed in lieu of foreclosure") to the bank in order to wipe off your liability on the mortgage.
Answered on May 29th, 2013 at 9:14 PM
Letting the property go into foreclosure will create another credit ding, although you might not be aware of it because it will not be available on your consumer credit report. But creditors have access to more information about you than just your consumer report. Furthermore, since you didn't file bankruptcy, you could be responsible for paying any loss the mortgage company may take when they foreclose. A short sale may be the solution, but look for a realtor with connections at your mortgage company.
Answered on May 29th, 2013 at 8:41 PM
As a cosigner, you are still entirely responsible for the mortgage debt.
Answered on May 29th, 2013 at 8:27 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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In Arizona there would be a trustee's sale. If your property is under 2 ? acres then you would be protected by the anti-deficiency statute. If you have a second lien you may or may not be protected. It depends on whether that second lien is purchase money debt. If your property is located outside Arizona then I do not know the answer.
Answered on May 29th, 2013 at 8:00 PM
Bankruptcy Attorney serving Dallas, TX
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Polk & Associates
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If he filed bankruptcy and did not reaffirm the mortgage, then he no longer owes the debt represented by the mortgage's promissory note. So he could walk away with no further consequences. But if you did not file bankruptcy then you still owe it. You can walk away but you'll end up with a foreclosure and perhaps still owing a deficiency balance after that. If you want to be able to walk away too like he can then you need to file a bankruptcy like he did.
Answered on May 29th, 2013 at 7:39 PM
Deborah F. Bowinski
If you walk away from the loan the lender will eventually foreclose on the property and then, depending upon where you live, the lender can try to collect any remaining balance from you since your husband's bankruptcy did not relieve you from the obligation to pay.
Answered on May 29th, 2013 at 7:39 PM
Bankruptcy Attorney serving Plantation, FL
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Moffa & Breuer, PLLC
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There is not enough information. If you are on the NOTE, rather than on the security for the note (the Mortgage-if you were married at the time you HAD to have signed the Mortgage), then you are personally liable. If not, you are not liable and your credit will remain good. Your husband?s credit started rebuilding from the date of his bankruptcy, but it will take 2 years before he?ll be offered bank financing. Watch out for Condo or Homeowners? Associations. They have the right to go after you and your husband for any future unpaid fees until the house is foreclosed. Your husband would have discharged any pre-bankruptcy unpaid fees, but post-bankruptcy HOA fees are NOT dis-chargeable.
Answered on May 29th, 2013 at 7:35 PM