Life after CH7

[woohoogirl]

I was thinking (I know I shouldn't do that...usually gets me in trouble), if I plan on buying another house at least 2 years after I get discharged, what do I do with the current house? Do I try to sell it and hope that I can get what I owe the bank, or do I just hand it over to the bank. I know that it depends on the amount of equity in it, because I'm sure as heck not going to hand the bank a house with $5,000 or $10,000 equity.
I realize I am getting ahead of myself, because I haven't even filed, but I'm pretty sure that myphysical limitations will require a one level house in the future. Just wanted some more information in my already taxed brain.
Thanks,
Woo

[emoney]

It does seem that your thinking is getting ahead of the situation. Why sell or move is the first question I would ask myself. Moving is expensive and stressful.
regards,
emoney

[woohoogirl]

I realize I am getting ahead of myself, because I haven't even filed, but I'm pretty sure that my physical limitations will require a one level house in the future. Just wanted some more information in my already taxed brain.
Thanks,
Woo

physical limitations

[FreshLikeADaisy]

This is just my thought, you may wish to approach it differently, but given the current real estate market volatility and general downward trend, I think you have to weigh that decision based on *if you were ready to go today*. In other words, if your Ch7 had already gone through, a couple of years had passed, and you were free and clear to apply for a mortgage TODAY, how much equity would you have? Where would you think about moving? How easy is it to sell a house in your neighborhood? Did you reaffirm your present mortgage or do a ride-through?

Trying to picture the what-ifs two years from now when you have so many changes going on today will warp even the best mind. Paint a picture using today's info, and then start changing the variables. These are just my thoughts; your mind might be far sounder than mine...

[keepmine]

Do I try to sell it and hope that I can get what I owe the bank, or do I just hand it over to the bank. I know that it depends on the amount of equity in it, because I'm sure as heck not going to hand the bank a house with $5,000 or $10,000 equity.


Be careful here. If your equity is minimal and you reaffirm the mortgage you could be stuck with a deficiency balance.
Another thing to consider witha small amount of equity is, realtors fees and closing costs can chew that up in a hurry.

[woohoogirl]

Let me ask this question a different way. If I am able to not reaffirm my mortgage and just "ride through", when I am able to get a decent rate on another mortgage, would I have to sell it or could I call the bank and tell them it's now theirs? Again, I know it depends on the equity when I try to sell, but I'm just wondering if I happen to be in a negative equity situtation when the time comes, if I don't reaffirm it, I can just walk away?
I have to think little into the future, because, as mentioned, I will have greater physical limitations at some point in the future. Hopefully later than sooner, but you never know!!

[keepmine]

If you don't reaffirm, you can walk away at any point with no liability.

[One Half Full]

If you don't reaffirm, you can walk away at any point with no liability.

can you please cite this? I would like to read the whole article. Thanks!

[FreshLikeADaisy]

I don't know if there are any articles, Half, but it's the law. If you want a specific debt to survive bk, you have to reaffirm it in writing, otherwise the debt is discharged. That includes secured debt, like a car loan for instance. When the debt is discharged in bk, it's up to the lender to come get the car, which they generally won't if the debtor keeps his/her payments current. Same with a mortgage: it is a secured debt just like a car loan. If the actual mortgage is not reaffirmed in bk but the debtor keeps making payments, generally the mortgage co accepts that and the debtor stays in the house without much change. The debtor can sell it or even pay it off, just as if nothing had changed. But if the debtor defaults on payments, or decides to walk away, he/she can do so: the debt itself was discharged in bk. The tradeoff is that the debtor also completely loses any equity in the secured property if he/she abandons it.

I think this is also known as a ride-through (?) where you just keep making the payments but do not actually reaffirm. Not every state allows it, but many do.

[keepmine]

can you please cite this? I would like to read the whole article. Thanks!

Here ya go.

http://doney.net/bkcode/11usc0524.htm

(c) An agreement between a holder of a claim and the debtor, the consideration for which, in whole or in part, is based on a debt that is dischargeable in a case under this title is enforceable only to any extent enforceable under applicable nonbankruptcy law, whether or not discharge of such debt is waived, only if--

(1) such agreement was made before the granting of the discharge under section 727, 1141, 1228, or 1328 of this title;

(2) the debtor received the disclosures described in subsection (k) at or before the time at which the debtor signed the agreement;

(3) such agreement has been filed with the court and, if applicable, accompanied by a declaration or an affidavit of the attorney that represented the debtor during the course of negotiating an agreement under this subsection, which states that--

(A) such agreement represents a fully informed and voluntary agreement by the debtor;

(B) such agreement does not impose an undue hardship on the debtor or a dependent of the debtor; and

(C) the attorney fully advised the debtor of the legal effect and consequences of--

(i) an agreement of the kind specified in this subsection; and

(ii) any default under such an agreement;

(4) the debtor has not rescinded such agreement at any time prior to discharge or within sixty days after such agreement is filed with the court, whichever occurs later, by giving notice of rescission to the holder of such claim;

(5) the provisions of subsection (d) of this section have been complied with; and

(6)

(A) in a case concerning an individual who was not represented by an attorney during the course of negotiating an agreement under this subsection, the court approves such agreement as--

(i) not imposing an undue hardship on the debtor or a dependent of the debtor; and

(ii) in the best interest of the debtor.

(B) Subparagraph (A) shall not apply to the extent that such debt is a consumer debt secured by real property.