What to do about a Chapter 7 and the non-reaffirmation of a mortgage?

Filed for Chapter 7 and discharge was 4 years ago. Did not reaffirm mortgage debt but continued making payments with no misses and no 30+ days late. Now I’m unemployed, spouse still working but family income is 50% of what it was. We have 2 kids each, with 1 more year in college. Can’t qualify even for HARP2, and lender refuses to discuss HAMP. What happens if we vacate the house, move to a rental, call the lender and tell them the keys are under the mat?

Asked on August 17, 2012 under Real Estate Law, Georgia


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Depending upon if the loan is the original loan when the home was purchased and the home is then foreclosed upon by the lender then you would have no recourse for any posisble deficiency judgment as a result. However if the loan is not the originbal loan for the home when you bought the home (refinance) then there could be a deficiency judgment against you if the home is sold for less than what is owed on the loan secured by a mortgage.

Given the circumstances that you have written about, I suggest that you consult with a real estate attorney to assist you in the matter you have written about to go over your legal options. Such options may be a loan modification or a possible short sale of the unit as opposed to walking away from it.

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