Best Options for House After Chapter 7 Discharge
My question involves bankruptcy in the state of: Utah
Chapter 7 Discharged just over 12 months ago. Did not reaffirm the house, too far upside down and payment to large for the "New" me.
B of A is like talking to a shoe. Loan mods offered but not defined and without principal reduction it seems crazy to sign on any doc that puts me 75+K upside down again. So, got notice of deficiency. Worst case is I have another 60 days before I have to leave. Best case is much more.
Goal, Buy more time to save more money. I would stay here if we could come to terms that are palatable. There appears to be no mechanism for that discussion..
Question: What is best option for returning the house.
If a foreclosure will not show up on my credit I don't mind that route. House was discharged. But will it show up?
Short Sale,... Can I do that with out putting myself back on the hook for the property?
Deed in Liu ? what is the upside to that for me.
Sidebar question
In a short sale situation could my wife (who was never on the loan, and we were not married when I bought the house) Make an offer on the house and buy it? Wife's BKO was 24+ Month ago
Thanks for the input in advance
Re: Best Options for House After Chapter 7 Discharge
You should expect that the foreclosure will appear on your credit report despite the prior discharge. There are cases upholding the listing of a post-discharge foreclosure action as an accurate entry on the credit report. The foreclosure serves a different purpose than collection of the debt - it allows the lender to gain title to the collateral.
The benefit of a deed in lieu of foreclosure is that it conveys the property back to the lender without foreclosure. A short sale involves the lender agreeing to allow the property to be sold for less than the amount of the loan; if the lender agrees to that but intimates that it would want to hold you responsible for the difference you can remind the lender of the discharge. If the bank senses that your "short sale" is an inside deal with your spouse I would expect them to withdraw their consent to the sale - they want to maximize their return, not give you an incentive to do a poor job marketing the house so you can get it for less than you owe.
Re: Best Options for House After Chapter 7 Discharge
Thank you for the reply.
I did not see the possible angle of the bank and inside deal with my wife. It was not intended that way but makes sense. We are looking at purchasing a home now and this was a passing thought. My main concern was the credit report. Your answer was spot on to help there.
Happy new year all..
R