I recently went through a divorce. During this time period the home we shared went through foreclosure. There is about an 86k difference in what the home sold for and what we owed. It was the first mortgage on the home and we had mortgage insurance. I am worried about a deficiency being issued against us for the remaining balance. The right thing to do would be to pay it back but I have a small income and no assets. If I file for chapter 7 will it cover the possible future deficiency? Or do I need to wait until I receive notification from someone that they are going to sue for the deficiency? Thanks for any insight!
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Filing BK now will discharge your personal liability for the debt, whether or not you are sued for the deficiency first. But, if that is the only reason you are considering filing BK, it may make sense to wait until they sue you to file BK. They may not bother.
Get past that concept of what the "right thing" is. The right thing would have been for the mortgage companies not to keep loaning money to people who couldn't afford it, leading to inflated home prices, leading to the crash which caused so many homes to be underwater. The right thing is doing what you can do legally to put your family on the best financial footing possible.LadyInTheRed is in the black!
Filed Chap 13 April 2010. Discharged May 2015.
$143,000 in debt discharged for $36,500, including attorneys fees. Money well spent! -
Thanks for the reply!Comment
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