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  1. #1
    Join Date
    Feb 2008
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    2

    Default Foreclosure And Bankruptcy Advice

    Hi there,

    I'm looking for some general advice on what may be the outcome of our scenario. Here's our situation:

    Primary residence (California) is upside down approximately $100K and we strongly considering to walk away from it. We had pulled some money to do a major home addition. At the end of the project, we attempted to refinance to combine all of the expenses (some credit cards). THe appraisal came in much lower that anticipated and we were left with a good chunck of credit card balance that could not be payed off by the refinance. Combined with falling home prices, we are stuck.
    So, the question: If we walk away, the house will foreclose and because we refinance, the bank will attempt collect the difference? We are also considering filing for bankruptcy to wipe out the credit card debt from the home addition. Would filing bankruptcy prevent the bank from collecting the difference?

    Aside from this we have two other investment properties (California) that may be flat with no equity or slightly upside down. We are considering on letting one of them go and keeping the other. If we file for bankruptcy (Chap.7)and foreclose on our main residence and one of the investment property, can one keep the other property?

    Any advice or input will be greatly appreciated!

  2. #2
    Join Date
    Sep 2005
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    Behind a Desk
    Posts
    98,846

    Default Re: Foreclosure And Bankruptcy Advice

    Quote Quoting Moto
    View Post
    If we walk away, the house will foreclose and because we refinance, the bank will attempt collect the difference?
    As a general rule, yes.
    Quote Quoting Moto
    Would filing bankruptcy prevent the bank from collecting the difference?
    That's going to depend upon the type of bankruptcy, your other assets, etc. - discuss it with your bankruptcy lawyer.
    Quote Quoting Moto
    If we file for bankruptcy (Chap.7)and foreclose on our main residence and one of the investment property, can one keep the other property?
    That's going to depend upon the type of bankruptcy, your other assets, etc. - discuss it with your bankruptcy lawyer.

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