Should We Stay in Our Home or Walk Away Like Others? – Kim

“Dear Steve,

My husband and I have good jobs, together making about 150K a year. We are paying off our debt, starting a Roth, adding to the emergency fund, trying to pay off the cars….but…..what are we suppose to do with our house!!

We bought it in 2003, put about $70,000.00 down, still owe about $344,000. We are not late on our payments, but unfortunately, many of our neighbors walked away, 73 forclosures in our neighborhood alone. Our house is just not worth crap. We do love it here, but plan to move in 15 years when my husband retires. We figure if we put it for sale it would never sell, since silimilair homes are going for nothing, and we do not want to walk and ruin our credit. Michigan’s market is struggling. Should we reassess in 5 years? Keep it another 15? Walk like the others? Help!

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.


Dear Kim,

I suppose if you were going to make a mathematical evaluation of what to do you’d need to know what a home like yours is worth now.

But above that, if living where you do now improves your life and meets your needs then that has some value to it as well. The question is how much that is worth to you.

Walking away isn’t as easy as just handing back the keys, the lender can chase you for the loss they experience on the house so handing back a home needs to be followed with a bankruptcy to end the obligation to come.

So, do you think this is a time that you could use to start fresh and cut your ties to your old debt and build a new future or are you willing to sit tight and hope that by the time you move the property has returned to what you once paid?

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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