Question about walking away from house after discharge (or close to discharge time)

[tammygirl1]

We are currently keeping our house and still have many many months before discharge but curious to know what will happen if we eventually decide to give our house up. We live in N. California and rent would not be much cheaper than what we pay now for the size of house we have/need (5 of us -- 3 teenagers). We are still about 100K underwater even after the lien strip but want to stay in the house until at least 2 of 3 kids are of age and move out. This will be at least 3 years. I don't think we will want to give the house up before discharge as the trustee will prob want to amend plan and we assume we will be making more, back child support and back taxes will close to paid up so that would mean a potential large increase in payments....Would it make a difference to let it go after discharge so that we don't have to go through amendments rather than before discharge? I don't want to rock any boats during our 5 years....

I tried searching on this and only got results referencing Ch 7 not Ch 13.

Thanks

[newbie2]

A chapter 13 discharge is much different than a 7. In a Chapter 13 your secured debts are NOT discharged unless you give them up during your plan. If you are going to walk away from your house do it before your plan ends so that the debt can be discharged.

[dneil]

I have a question on the order of this. If you did a chapter 7 and did NOT reaffirm the mortgages and later (say 4 years after discharge) you walk away from your home... would it then be reported on your credit report as a foreclosure (even though the discharge shows your mortgage loans as included in Bankruptcy at a '0' balance? I have been curious about this for a while now.... anyone know?

[debee]

I have a question on the order of this. If you did a chapter 7 and did NOT reaffirm the mortgages and later (say 4 years after discharge) you walk away from your home... would it then be reported on your credit report as a foreclosure (even though the discharge shows your mortgage loans as included in Bankruptcy at a '0' balance? I have been curious about this for a while now.... anyone know?

The foreclosure appears in the public records section of your credit report. It shows up when the property sells at auction.

[dneil]

so does it affect your credit score? I hear what you are saying that it is publicly posted in the newspaper and also at the home being foreclosed on. I was just curious if it will go on the credit report with equifax, experion and transunion? I didn't reaffirm, but I did this because what happens if my husband leaves me, or dies or loses his job again.... or if we have some other type of tragedy that causes us to not be able to pay. Since the debt has been included in bankruptcy and shows zero balance, can they four years down the road put a foreclosure on your report with those agencies?

[debee]

Yes, it goes on your credit report. It doesn't appear on the tradeline. That will say, "IIB" for "included in bankruptcy". There is a section for public records on your credit report. That is where it will appear.

In terms of how much, if any, your score would drop because of a foreclosure four years after bankruptcy, I don't know. Hopefully someone with more knowledge on this subject will see the thread and post.

[pathfinders]

I do not think it will report as a Foreclosure , You have all ready discharged the Home and have ZERO responsibility to the Lender. you can just walk away... No worries.

[pathfinders]

you can have a foreclosure on your credit report showing before you BK, so you could have a foreclosure and a IBB on your report, , not after BK. ( Only the IBB will show up that is it.)


Now if for some reason you reaffirmed, ( would not do) than you are on the hook for the Note all over again. but to just walk away.. No worries on a double whammy on your CR.

I respectfully disagree with Debee. Anyone else clarify please?


Kind of like having a charge off on your credit report and than IBB. But never a IBB and than a Charge off on your report.

[DebtEnder]

A foreclosure 1 month or 20 years after BK, assuming no re-affirm or refinance, will not affect credit in any way shape or form. It will be an issue with getting a new FHA backed or Conventional loan but that is it.