What will happen if I walk away from my house?

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What will happen if I walk away from my house?

I filed bankruptcy 3years ago. I signed a reaffirmation agreement which states that if I default they can take the house or my income. I have tried to refinance but when they did avtitle search there is a lien against house for $15000( for my exs debt). The foundation will also cost $10,000 just to bring it up to FHA standards (since it is a double wide I can’t go with conventional loan). Everything I have tried leads to a dead end.

Asked on January 27, 2011 under Real Estate Law, Tennessee

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Because you reaffirmed, you are still subject to the debt. The following is what would generally happen, but you have to look at the specific language of any agreement(s) you signed to see what happens in your situation. As a general matter, after a house is foreclosed upon, if, after it is sold at a foreclosure sale or auction it does not bring in enough to pay off in full the mortgage, the lender can sue the borrower for that remaining balance, called seeking a deficiency judgment. So the bank may be able to sue you for any additional money you owe after the house is foreclosed upon and sold. And you will have a default and foreclosure on your credit report.


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