Will discontinuing payments in an owner-financed real estate deal hurt our credit?

A wildfire just destroyed the lot/neighborhood that we purchased a couple of years ago, anticipating retiring there. We are still making payments on the land pursuant to an owner-financing arrangement by contract and arranged through a broker. If we discontinue payments and surrender the property back to the seller, will it be considered a foreclosure and/or hurt our excellent credit? Or is it simply a loss of the thousands of dollars we have so far paid? And how do we convert the title back to the seller?

Asked on June 26, 2012 under Real Estate Law, Florida


david slater / david p.slater, esq.

Answered 8 years ago | Contributor

You would need his consent for him to take back the property.  If he obtains a judgment, it will affect your credit rating.

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