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Surrender Underwater Mortgage in a 13?

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    Surrender Underwater Mortgage in a 13?

    We are meeting with our attorney next week and I want to be prepared. Here's the situation:

    Own and Operate LLC Partnership (profitable)

    Income 200K/yr.

    Unsecured credit: 82K
    Taxes for this year: 40K
    Secured credit: 40K (two cars, dirtbike, piano)

    Mortgage: (Zillow at 200K) 5yr Int.only/ARM (Sept 10 adjusts) (Not original loan.)
    394K First
    50K Second

    Disposable income is minimal because of living expenses + business loan + taxes.

    My question is about our Mortgage. We live in California and fortunately didn't completely over extend our mortgage like most and due to the economy are way under. Can we surrender our home and if so, how does it work? We are with Chase for our first and second. Will we have to lump the deficiency in with our unsecured debt?

    Just want to make the right financial move.

    Thanks for your time.
    Last edited by lolie; 02-24-2010, 11:02 AM.

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