If we filed bankruptcy2 years ago and are having trouble affording ourhome, what are our options?

We filed Chapter 7 and elected to keep our home mortgage and have a home equity loan as well, never did a reaffirmation with either of them. Recently, finances have gotten more bleak and we now owe more on the house than it is currently worth. We have had our house on the market for 3 months now and no offers. What options and/or protections do we have given that we have already filed bankruptcy?

Asked on July 23, 2010 under Bankruptcy Law, North Carolina


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Many of us are in the same boat.  What you need to do is to see if you can do a loan modification with your bank or refinance for a lower rate outside your bank.  If you can not do that and just want to get rid of the house, ask your bank to consent to a short sale and to waive any deficiency.  This way they will not come after you.  The last option is to ask your bank to take a deed in lieu of foreclosure (also waiving deficiency rights).  Then the house becomes the banks to sell and not yours.  It saves them from starting a foreclosure action against you which can be very costly.  All these options should be available to you since you did not list your mortgage in bankruptcy.  Good luck to you.

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