Walking away from home post-discharge? Any experiences?

[considering7]

Here's my situation. Going through a Chapter 7 now and hoping to come out of it in 3 months with a house that is worth about $250-265k and currently oweing about $325k on it ($285k on a first mortgage + $40k on a Heloc) We paid $379k for it three years ago

Attorney suggested that we consider doing a "retain and pay" but after discharge, consider stopping the payments on the first mortage and letting house foreclose, with the goal of buying another house that we wouldn't be underwater on. I gather it would take a few months for the bank to evict us, but we could save the payments we would have made and use as a downpayment on the new house.

Has anyone ever done this? I guess the big fear in doing this would be getting stuck with no place to live after getting evicted and maybe not qualifying for a mortgage for the next house.

[panda]

I am in the beginning stages of getting ready to walk. Chapter 7 discharged 2/15/2011 with mortgage to BOA included, retain and pay marked. Our last payment was for January so we have missed our first payment this month. We are moving out of state in May, so my only concern is that they hurry up and start the process, but with my luck it will probably take forever.

No new house for several years, and for us we may never buy another house. We will see how renting goes, but I do have a sister who is taking us in until we find something to rent, so we will not be totally homeless.

[Phil]

I did this as well. My original intention was to stay and pay and one month after my bankruptcy closed, my pay was decreased a few hundred per month. That was my final decision in deciding to walk. My last payment I made was November 2009. The foreclosure won't be final until March 2011. I was able to find a private rental and was upfront with the prospective landlord. He was very understanding and has been great. We moved March of last year but had I known it would have taken this long, sixteen months of living rent free and putting that money away would have been tremendous. But I have children and wanted to make sure they were settled and not knowing when everything was going to happen would have made me crazy. I don't regret it at all - the house was underwater and it was for the best.