Ask The Get Out of Debt Experts Real Estate

I Went Bankrupt But Did Not Include My House. Now I Want to Give it Back. – Kelly

“Dear Steve,

My bankruptcy was discharged in 2008 and I have been making mortgage payments ever since. I didn’t reaffirm the mortgage. I no longer want the house and willing to give up the house. My mortgage balance is more than $40,000 than the house is worth.

What can I do? Do I just call the mortgage company and tell them I don’t want the house? Or, do I try to make some type of arrangement with them to get out?


Dear Kelly,

Oh crap, right! It would have been great if the house had been included in the bankruptcy but it is what it is.

Call the lender and see if they have a cash for keys program where you can give back the house and they will give you a thousand or more to get out. This saves them the hassle and expense of foreclosing on you.

Just be prepared that at some point in the future the bank may come after you for money due on the house if they sell it at a loss unless you get it in writing from them that handing back the house is a full satisfaction of the debt you owe them. And don’t ever lose that letter. Put it with all your other important documents.

If they do come back after you latter we can deal with that then.

One word of warning, make sure the property taxes are switched back to the banks name also when they take the house back. Otherwise they’ll have the house and you’ll have the taxes.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

Steve Rhode

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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