Ch7 & Foreclosure question

[2muchinDebt]

We are about to be discharged any day..we filed CH7 and were a No Asset case. We got a modification on our home loan and rode it through the bankruptcy. So, say in 2 yrs we decide to abandon the house and get a new house and mortgage. Would this be a ding against our credit or since it's included in bankruptcy it won't ding our credit in 2 yrs?

I do know that we won't have to pay anything for the house, because it's covered under the CH7. Our lawyer said if the market doesn't turn around we should consider abandoning it.

[jlmaca]

We are about to be discharged any day..we filed CH7 and were a No Asset case. We got a modification on our home loan and rode it through the bankruptcy. So, say in 2 yrs we decide to abandon the house and get a new house and mortgage. Would this be a ding against our credit or since it's included in bankruptcy it won't ding our credit in 2 yrs?

I do know that we won't have to pay anything for the house, because it's covered under the CH7. Our lawyer said if the market doesn't turn around we should consider abandoning it.

If you choose to abandon the house in 2 years I believe the bank still must foreclose, unless they wanted to do a deed-in-lieu. This would be a hit on the credit report. Also after a foreclosure it takes a good 2 to 3 years before any lender would consider you for a home loan.

[SMinGA]

Yes you could walk away from the house/debt - but as jlmaca points out you probably would not be able to actually buy another house in 2 years.

[readytofile]

If you choose to abandon the house in 2 years I believe the bank still must foreclose, unless they wanted to do a deed-in-lieu. This would be a hit on the credit report. Also after a foreclosure it takes a good 2 to 3 years before any lender would consider you for a home loan.

That's not what I've been told when I asked this question:

http://www.bkforum.com/showthread.php?t=54360

The lender would have no recourse except to foreclose on the property itself... known as an in rem action. The lender would not be able to come after you for any deficiency caused by the foreclosure. They would not even be able to report this to credit bureaus, although you may need to do some "cleanup" after the fact.

[jlmaca]

That's not what I've been told when I asked this question:

http://www.bkforum.com/showthread.php?t=54360

This makes sense since the home was included in the bk. I'm sure the credit takes a big enough hit with just the bk. The 2-3 year timeline on getting a new mortgage probably starts upon discharge of the bk.

[readytofile]

My credit actually didn't take that big of a hit. My score was 670 before bk and 2 months ago it was 607. So I opened a small card and put a little bit on it in an effort to raise my score up to 700 or more before we abandon this house and move out of state hopefully next year.

[jlmaca]

My credit actually didn't take that big of a hit. My score was 670 before bk and 2 months ago it was 607. So I opened a small card and put a little bit on it in an effort to raise my score up to 700 or more before we abandon this house and move out of state hopefully next year.

That's not too bad a hit. Mine went from 650 to 580-590 depending on the credit reporting agency. I applied for a credit card to improve credit score and was denied. I'll try again next month.