We recently filed Chapter 7 and waiting for discharge. Our mortgage payments are up to date but we did not reaffirm. Car payment reaffirmed so credit reporting will be good on that end. Since our plan is to move within the next two years, our credit counselor has advised us to find an affordable apartment now. We would save about $1,000.00 a month by doing so. We are not underwater on the house but very close. If we put the home up for sale it would barely pay the real estate commission. We have been advised to put it up for sale and if it sells OK. But was advised to stop making the payments so we could save for an apartment. It would probably be around 5 months before the bank would take the house back or it sells. This would give us the opportunity to save about $10,000. We already know where we would like to live and know we could get an affordable apartment to rent.
I’m sorry to say it sounds like you’ve done this ass backwards. If you were going to give up the house then you should have considered doing that before you filed for bankruptcy and included the mortgage in your bankruptcy to discharge your liability for it. If you filed bankruptcy and then are going to have this huge delinquent debt hanging over your head it ruins your fresh start.
It also leaves you exposed to a huge potential deficiency debt the lender can come after you for if you simply let the house go now. Of course that depends on what state you live in and if this is your primary house.
Did you discuss this approach with your bankruptcy attorney? Who is this credit counselor giving you this advice?
At this point it seems like the better option is to try to reach a short sale arrangement with your lender and sell the house for what you can get out of it. The odds are pretty good you’ve got a realtor in your area that specializes ion short sales.
Pick up the phone right now and call your bankruptcy attorney. This is a mess for sure.
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