I filed Chapter 7 but did not reaffirm my mortgage yet kept making payments, can I just walk away now?

I filed bankruptcy 7 years ago. I had the house sold but the home inspection showed serious violations. I cannot afford to fix the house and continue to make payments. Can I walk away from the house? If so, how will it affect my credit score and can they come after me if they sell the house for less than I owe?

Asked on September 5, 2012 under Real Estate Law, Kentucky


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

If you filed for bankruptcy protection seven years ago, but did not reaffirm the mortgage and the loan securing the mortgage was not discharged in your bankruptcy, walking away from the home that you have written about could have a negative effect upon you in many ways where you owe on the mortgage presumably:

1. your credit score will have a foreclosure on it. The foreclosure will severly hurt your credit score in my opinion.

2. if the loan is not purchase money, you possibly could be held liable for a deficiecy judgment if the home is lost at a foreclosure and it is sold for less that what is owing on the loan. A purchase money loan is the original loan in place used to buy one's main home.

I suggest that you consult further with a bankruptcy attorney that has experience in real estate law to assist you further in making a wise decision as to how you want to deal with your home.


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