House question

[GregnSC]

The wife and I went through chapter 7 which included our home, in June 2010. The only way we got through that process was the info on this forum so I know there are lots of knowledge here.

We were able to do real good making our payments and still haven't missed a payment on anything so our credit since then is perfect. At the beginning of Feb 2014 I lost my job (I was self employed) due to the economy and have not been able to find employment since then due to health restrictions. We are getting to the point that we are uncertain if we can maintain our mortgage payments any longer. I have been trying to get things ready in the house if we do decide to leave but now I have found termite damage.

My understanding is that they can't put a negative report on our credit file because the home was included in the chapter 7 and want to ask what are our liabilities as far as termite damage goes if we decide to walk away from the house. We aren't wanting to stick it to the bank holding the loan but we are really just not able to make any repairs financially.

[LadyInTheRed]

If you did not reaffirm the mortgage, you have no liability at all to the mortgage company. If you decide for certain you are ready to give up the home, stop paying the mortgage. Then live there for free until foreclosure is complete, or until the termite damage makes it unsafe to inhabit.

The bank should not report a default of a discharged debt on your credit report. But, the foreclosure will be a public record and will probably prevent you from getting another mortgage for at least 2 years from the date of foreclosure. If you can't afford the home, you can't afford it. The affect on your credit report should not be a factor in your decision.

You definitely should not worry about sticking the bank with the loan. The bank will be fine. Do you think they will care that you can't pay your mortgage and maintain the home because your health restrictions are making it difficult to find a job? Concern for the bank is probably the only thing that should be lower than your credit score on your list of factors to consider in making your decision.

[Drazil65]

You are no longer obligated to the bank and sticking them should be the last thing you worry about. Trust me they are not worried about you. Thank goodness you had the sense NOT to reaffirm the mortgage, this is exactly the reason you should not when faced with the decision during bankruptcy. No matter how good the intention is, you never know, period!

Stop making payments as soon as you know you will not be keeping the house, save up the cash for moving, you could have 1 year or 2 before foreclosure (or more). The debt has been discharged, it's gone, make the decision a business one and move on.....good luck!

[GregnSC]

Thanks for the replies, but my main concern is the termite damage. Does this not change my obligations at all?

[LadyInTheRed]

Thanks for the replies, but my main concern is the termite damage. Does this not change my obligations at all?

No. No liability to the mortgage company, means no liability.