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  1. #1
    Join Date
    Mar 2012

    Default Surrendering Home, Walk or Stay

    I filed chapter 13 back in Nov 2011, and am now faced with a difficult decision regarding whether or not I should walk away or keep my home. I hope someone can fill me in on any advice you might have or personal experiences. I filed chapter 13 with a matured balloon mortgage and now my bank wants to claim the whole amount into my bk payments monthly since I technically have no mtg. I have a court date in a few weeks and my lawyer says I only have a few options. Surrender the home to the bankruptcy and either walk away or maintain payments and possibly look for a modification or a refi. Since I have been denied a modification in the past and I refinance with another bank could be rough however i did speak with another bank and they said they could do a refi but only a year from my chapter 13 filing. So either gamble and throw money into a mortgage that might not be refi'd with time being a factor, or just walk away. The only think keeping me from walking is that i'm only around 20 to 30 thousand underwater and the house is in a good school district. If I walked I probably wouldnt afford rent in the same area and I dont know how difficult it would be to get a new loan for a new house since i'm still in a Bk. If anyone can help with any advice it would be greatly appreciated. Thank you

  2. #2
    Join Date
    Sep 2010

    Default Re: Surrendering Home, Walk or Stay

    Your attny is correct - you have very few, if any, choices.

    If your loan fully matured the only way to keep the property (your primary residence) in the context of a Chapter 13 is to propose a Plan that pays the lender in full with interest over the 60 months of the Plan. Your attny should have told you this from day one. See 11 USC 1322(c)(2) and 11 USC 1325(a)(5). The only way around this (other than walking away) is to get the lender to agree to some other treatment either inside or outside the context of the bk.


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