Confusing House Question

[aplcr944]

Our house, got it on a VA loan, is in another State. There is a squatter (Section 8 dropped them so we receive no rent from Section 8 anymore) in the house. They are not leaving and we will need a lawyer to evict.

Since we longer receive rent we cannot pay the mortgage. We are renting a place in a different state where we currently live.

If we file Ch 7, what happens to the house? We simply cannot pay the mortgage. I had to move for employment reasons.

[btbeme]

Some GENERAL advice - we would need more info for specific advice...

If you file and do not reaffirm the house, the bank will eventually foreclose when you do not pay. You can ask them for a Deed in Lieu as soon as your BK is discharged. You should try to unload the place ASAP after discharge, since a squatter will likely tear the place apart before they are forced to leave. Maintain liability insurance until you are off the deed.

If you include the house in BK AND you have no equity in it, you will not have any financial liability for the loan afterwards. The house will only be secured by the deed, which you would want to get off ASAP. If you DO have equity, the bank will take it back, but might try to mine you for any damages the squatter caused which would reduce its value.

Lots of info in these forums regarding situations like yours. If you would like, please post more details regarding your financial position on the house, cars, etc and we may be able to give you some specific advice.