We are going to be filing bankruptcy soon. My husband was very ill 18 months ago and was out of work for 6 months. Our mortgage company did a loan modification for us which saved our butts, but we racked up about 20k in cc debt and now we are unable to afford the payments and our new mortgage. We are done with the modification and the payment is not outrageous but the problem is we bought our house when the market was peak in 2006 so before all this we were already 50k upside down and now they've tacked another 17k on top of that. We are literally stuck in this house forever. The house is too small and we are miserable here so there's no incentive for us to just suck it up and stay plus the plan has been to move out of state in 5 years. Looking ahead we don't see how this can happen. We have a VA loan so I know it's not as easy as just filing it in bankruptcy as well, and we have 2 teens and 3 pets so I know we wouldn't easily find another place to live. Are there any options for us out there within or outside of bankruptcy?
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Why can't you just surrender the home in a bankruptcy? I'm not familiar with any issues regarding surrendering the home and a VA loan. You should discuss your situation with a local attorney.Any information posted by me is for general informational purposes only. While I am an attorney, I am not YOUR attorney and any information I provide is not legal advice. -
I think with a VA loan you have some severe consequences, not positive though. I was planning on actually calling an attorney today but I didn't have time,and now it's too late
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In line with the comment of BKattyMI, it does not matter that this is a "VA" loan. If you do not want the home you "surrender" it. If you want to keep the home you indicate that you will "stay and pay" and simply do not reaffirm. So long as you do not reaffirm you have no financial responsibility - just make sure you put the VA on your master mailing matrix so it gets notice of the bankruptcy. Not a big deal.
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Again, to my knowledge (and despritfreya confirmed), a VA loan is treated just as any other mortgage loan in a bankruptcy. If you don't want the house, you surrender it and the VA has the right to take the house back, just like a normal mortgage. You should check with your local VA office to see if there is some sort of consequence for any VA benefits you may be receiving, but I doubt it.Any information posted by me is for general informational purposes only. While I am an attorney, I am not YOUR attorney and any information I provide is not legal advice.Comment
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I haven't been through this but it may be possible to not ever get another VA loan as they have databases. Others can confirm, like I said I don't know but when I did mtg loan processing, we had to check all the databases prior to sending loan for underwriting for applicants name. if you showed up on any of them the loan either stopped right there or whatever it was was paid out of closing..
Again just a side comment, others may know for sure.Comment
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