giving home back will it erase debt

[123boxie]

I posted earlier about whether or not to walk away from the expensive home and stay in our smaller less expensive home. (We have two homes very close together).

We have struggled with the decision and I do believe we are going to walk away from the larger but more expensive home. However, if we file Chapter 7 will the mortgage that we owe on the bigger home be wiped away since we won't reaffirm?

Also we have both home loans through the same credit union will they let us reaffirm on the smaller home we want to keep? If they don't will they take our home?

I mean it is bad enough we are giving back a beautiful home and staying in cramped quarters just to get by, but I don't want to be led to slaughter. I want to keep paying on our home and have it, not have the banks hold it over our heads.

Thank you for all the help!

Jen

[justbroke]

The entire purpose of bankruptcy is to wipe away debt and have a clean state (fresh start). If you don't reaffirm the larger home, and surrender it in the bankruptcy, then you will not owe one penny on it.

Since you have both homes from the same credit union, you may need to check to see if they are cross-collateralized... meaning they "secure" each other. If they are, you should ask that they remove the cross-collaterization. They might tell you that you can't keep one without the other. In that case, I'd tell them to Eat Wood (that's my term for forcing them to take the homes back, at a loss).