Question

[Confused]

I saw your thread and am curious if I could get some advice. I am facing foreclosure in a month, due to reasons that I would prefer not to tell here. I also owe about 20,000 more than the neighborhood is selling for due to the market. My lawyer has been telling me about bankruptcy, but I really just want to off load the house. I figure that my bank will be coming after me for the amount between what the receive in sale and what I really owe. My question is - if I file bankruptcy after I lose the house would that wipe away the difference or is that classified differently?

[HRx]

I saw your thread and am curious if I could get some advice. I am facing foreclosure in a month, due to reasons that I would prefer not to tell here. I also owe about 20,000 more than the neighborhood is selling for due to the market. My lawyer has been telling me about bankruptcy, but I really just want to off load the house. I figure that my bank will be coming after me for the amount between what the receive in sale and what I really owe. My question is - if I file bankruptcy after I lose the house would that wipe away the difference or is that classified differently?

Yes, it's not unusual to have negative equity in possessions that are discharged in a BK 7 filing.

Good Luck!

[maryweber]

We just added to our house. The estimates went over by 25,000. Which we put on credit cards. We now owe 95,000 on a house that in our area can not be sold for more than 40,000 and we owe 35,000 on credit cards. We own a 94 vehicle and pay on a 2000 van. We don't own any other property or have any other assests. If we file a chapter 7 (i think that is the one from what I've been reading)--do we lose our house?

[EdytaHome]

Does that mean the negative equity still has to be paid back, even after discharge?

[HRx]

Does that mean the negative equity still has to be paid back, even after discharge?

You're going to want to estimate the amount of negative equity and factor it into your bankruptcy so that it's discharged.

Good Luck!

[EdytaHome]

I guess, I'm confused. I thought that if you discharge and surrender a house in a bk, you don't have to pay anything, because it's been discharged. Why didn't my lawyer say anything abou this? He told me to stop paying the mortgage, surrender the house and be done with it.
How do I estimate negative equity?

[MOQuestions]

From what I understand about the process, you can discharge the unsecured debt, but if your house is tied to any of the loans (secured), then you will have to reaffirm on the debt to keep your house. If you want to walk away from the house, you just file and let the creditors take the house back.

[HRx]

I guess, I'm confused. I thought that if you discharge and surrender a house in a bk, you don't have to pay anything, because it's been discharged. Why didn't my lawyer say anything abou this? He told me to stop paying the mortgage, surrender the house and be done with it.
How do I estimate negative equity?

Let me see if I can clarify the confusion.

An individual will be balance bill any negative equity, that results from there surrenduring/foreclosing on thier house. And if you're balanced billed (negative equity) before you have filed a Chp 7 petition, all you would do is list the balance bill as one of your debts on your Chp 7 petition - so it gets discharged.

However, if an individual made agreements to reside in the property throughout the entire or the majority of the Chp 7 process, then they typically avoid getting balanced billed. Hence, your understanding of the process. The thing is the majority of people "surrender" thier property beforehand.

Let me know if this helps.

-Todd

[EdytaHome]

OK Todd, just please answer this question with a yes or no, because I'm very confused.
Will I owe any thing, if I surrender the house after my chp7 bk is complete? (again, we have no equity in the house and will be surrendering it, there may be some negative equity) Will we owe anything?