In order to avoid any penalties, shouldI file for bankruptcy after walking away from my mortgage?

UPDATED: Jun 20, 2011

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In order to avoid any penalties, shouldI file for bankruptcy after walking away from my mortgage?

I am currently getting ready to walk away from my mortgage (within less than a month). Should I file for bankruptcy to prevent backlashing from the bank?

Asked on June 20, 2011 under Bankruptcy Law, Michigan


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You need to find out if you live in a deficiency or anti-deficiency state. Second, bankruptcy is not considered a cure all and if the court determines you do not qualify or the reason or timing of your bankruptcy is questionable, it could theoretically kick out and dismiss your filing. Consider now that with short sales, the lender cannot seek those monies from you but you need to discuss those options with your lender. Have you considered a modification (either in house with the lender or servicer or a HAMP modification)? If you qualify, you could save your home. Consider talking to your lender or servicer and stay on top of the application process. Keep diligent and strict and detailed records. You could file a complaint with your state's department of banking if the lender or servicer drags its feet.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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