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Chapter 7 Bankruptcy and walking away from mortgage

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    #1

    Chapter 7 Bankruptcy and walking away from mortgage

    We filed a Chapter 7 bankruptcy and we were discharged in June of 2005 in Texas. We have since been paying and are current on our mortgage. We are now putting a lot of money into trying to maintain the upkeep on our house that is falling apart around us....there are so many problems going on that selling our home is not an option. Our mortgage was never "reaffirmed". Our credit scores are in the mid 650's. We would like to apply for another home loan and quit paying on this mortgage. If we are approved for another home loan (since our mortgate on our credit report does not show any payments we have made in the last 5 years nor does it show we have a mortgage balance) will there be anything that prevents us from doing this?

    I am just very worried that if we walk away from the mortgage/stop making payments......and being stuck not able to get a new place because of some reason or another.
    Thanks,
    Sandra
    Last edited by Sanandreyas; 06-19-2010, 07:43 PM.
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    #2
    Help please, anyone?

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      #3
      Is it an FHA loan? and do you have enough money for a down payment for another house?
      Chapter 7 07/30/2008
      341 09/17/2008
      Discharge 11/21/2008

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        #4
        It is an FHA loan and i have a small downpayment for another house at least 2-3% and if we do decide to stop making our loan payments i will be able to save more.
        Sandra

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          #5
          You can only have one FHA mortgage at a time. Arguably, you have been discharged from the note, but the mortgage is still in place. You've been paying for the home and it hasn't been foreclosed upon. There aren't any conventional mortgages for 2-3% down anymore.

          Best to find a nice affordable rental for the next couple of years. Good luck to you.
          Filed Chapter 13 02/2006 - Confirmed 05/2006 - Discharged 09/2011
          I'm not an attorney. My replies are merely suggestions or observations, not legal advice. As always, consult with an attorney before making any decisions.

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            #6
            So if they do start a foreclosure process...will we have time to find a rental home....i would hate to go over the 30 day late period and find out we to move immediately?

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              #7
              Originally posted by Sanandreyas View Post
              So if they do start a foreclosure process...will we have time to find a rental home....i would hate to go over the 30 day late period and find out we to move immediately?
              It looks you better have some emergency rentals scouted out. You would need to quickly move your stuff into a storage unit, and then go live a short term hotel or something until you find the right place. If you are going to be cutting it so close to the bone, you have to accept the possible consequences.

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                #8
                Foreclosure is a long and drawn out process. The timeline depends on state law. You likely have 6 months or longer before you have to leave.

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