Walk away from house????

[florida]

We will be filing chapter 7 in the new year but are VERY unsure what to do about our house.
We have a 1st & 2nd mortgage totaling $135,000. We have lived here for some time and had a good amount of equity in it. However, now the market values it at about $120,000.
So we are not in a devasting situation, but have some strong concerns. The neighborhood is really going down. Lots of forclosures and rentals and people are no longer keeping their property up.
Since we are filing bk anyway - does it make sense to get a fresh start all the way around? We don't anticipate the neighborhood getting better.
Also, do we move out prior to filing bk so the new bills are reflected (rent, utilities, etc.) on our schedule? We are slightly over the median income but our attorney said he feels confident he can get us a chp 7.
Any suggestions??

[frogger]

The neighborhood is really going down. Lots of forclosures and rentals and people are no longer keeping their property up.

Any suggestions??

I think you have answered your own question. Good luck!

[Faust]

I would move if I were you.

[logansdad]

We have a 1st & 2nd mortgage totaling $135,000. We have lived here for some time and had a good amount of equity in it. However, now the market values it at about $120,000.

You have no equity if you owe 135k and the house is worth 120k

[Chucksoutalu]

What location are you in Florida? Rent in the same area you live in may be just as bad or worse in regards to crime, cost ect. Research and weigh the pros and cons is the way to go. But seems like you got and idea already so like everybody here ya got to take that first BIG step and that always seems to be the hardest one! Good Luck

[1967]

My situation is similar. 8 years ago we built our house in a great little neighborhood. When we went to the bank they wanted to give us anything we wanted. My wife and I are very simple folks and wanted to build a little 1,200 sq. foot ranch. Being in construction I saved quite a bit of money but it still cost us a grand total of 160,000 with the lot, landscaping, and driveway.

When sitting down in the bankers office to get the money he actually laughed at us and said "nobody in their right mind builds a little house like that" then he said "You easily qualify for another 100,000 and you should take it because money is cheap and you can afford it"

We actually went back and fourth argueing about it, and I kept saying it crazy to spend another 100k. Anyhow, we build our tiny house.

Once we started digging the hole the city realized how small the house was and got pissed off at us. That week they changed the minimum sq. footage to 1800 sq ft. Once moved in the neighbors all laughed at us because we had the smallest house in the neighborhood.

Nowadays all the big 3,0000 + homes on my street are empty foreclosures and here I sit. Once I lost my job 2 years ago things got worse and worse and no here I am all the cards loaded up and my little family is just trying to hold on to any dignity we have left. I tried working with the bank asking if they could just work with us until we get on our feet but they treated us like dirt and scum.

I have followed the rules my whole dam life and lived very conservative and tight. Those days are over and now I could care less about the banks and the loan I have on it. When the neighbors all had big boats and airplanes we did without......and now I'm in the same situation they are, ironic really.

We are going to string the bank and live rent free for the next 3 years if I can, and I will make every effort in doing so.

All I'm saying is you might want to do the same. Live rent free and save money for another house that you can buy at a discount.

Sorry for ranting on but I just seen the light......it's a good thing!

Mike

[florida]

Thanks for all the responses.
It is just so sad...
This is the home we brought our babies home to. I know sentimental reasons should mean anything.
What I'm most confused about though is the legalities to actualy bk the house.
Since we can afford it and have never been late - are we allowed to include it?
Also - the rent we will have to pay is equivalent to what our mortgages are.

I'm just so sick that the neighborhood is declining. I honestly don't see that it will bounce back anytime soon. It seems to me we should get out while we can. To sell it isn't even an option - nobody is buying a thing.

[HakunaMatata]

Why can't you do a ride-through? You can remain in the house, continue to pay, and be relieved of your loan commitment (by not reaffirming). If values or the quality of the neighborhood decline, you can move on (the foreclosure process will occur; however, you won't be resposible for any deficiency).

[florida]

Hakuna-

I guess I don't know what a ride-through is...
So I keep paying on the house for now and then move out later???
How would we not be responsible if we don't include it in the bk?

[HakunaMatata]

A ride through will permit you to remain in the home provided payments are current. By not reaffirming and remaining current, you aren't giving up your right to discharge the underlying debt should you decide to move. However if you decide to reaffirm, you recommit yourself to the loan and if you decide to move, you are personally liable. This real property ride through option is district specific. If you have an attorney, I'd discuss this possibility with him/her.

[florida]

Wow, thanks for the info, this seems like the best bet.
I will definately check with my attorney.
However, I am in tampa bay, fl - if anyone else knows if this will work in my district.

[StartingOver08]

Yes, it works in your district.

BTW, ALL your debt is included in the BK. You can't pick and choose what to include or not to include. What you are doing when you do a ride through is NOT signing a reaffirmation agreement with the bank and not surrendering the property. You continue to pay each month if you want to keep the house.

1) If you pay all the way until the end the house is paid off, the lien is satisfied and you have no issues (make sure you get the Mortgage Satisfaction recorded if you choose this option).
2) IF, however, you decide at some point after your BK discharge that you no longer want the house, you can stop paying, walk away and the bank can foreclose, but not come after you for the deficiency because your personal liability for that mortgage note has been discharged in the BK. Its the best of both worlds really. The bank probably will not report your payments after your BK if you choose this option, even if the payments are made on time because you did not reaffirm.

[dm415]

Ride through then maybe try settling 2nd for 5 or 10%.

[killinstinct]

I say f$&k it. Find a nice place to live, leave, file, call it good. Don't stay on the sinking ship. It will all go away in the BK anyway.

You could hang out until auction on your foreclosure if you stop paying now, potentially saving up thousands...but then your credit is trashed and you may have a hard time finding a decent place to rent (depending on your local market).

Good luck!!

My vote is to leave, though.

[kw1025]

I had a lengthy conversation with Bank of Ameica today concerning "ride through". The did not send me a re-aff agreement, and i was concerned they could kick me out anytime. They can't. You must be in default on the loan. Also, they said they DO report to credit after 90 days of discharge, they also allow online access to all accounts after about 90 days. Once they recieved the discharge notice, they already know that you want to keep the property, becuase of the filing. They also said that on your credit report, it will say "paid as agreed, and NOT "Included in bankruptcy". I was worried at first, but it appears that a ride-through really is the best of both worlds.