Discharged! Thinking of giving up our house!

[spooby72]

We were just discharged on our Chapter 7. We did not reaffirm our house and it is reporting IIB already. We are thinking of giving up our house as it is much more than we need and we want to live within our means this time around. If we move into even a "luxury" apartment, we can save over $800 a month without our house.

We also know this isn't our forever home and we want to build another house in about 3 years.

1. What are the pros or cons to giving up our house?

2. If we did stop making our payments, how long could we stay here (without worry) before we were forced out?

3. What about our taxes and insurance that are being escrowed?

4. Will we suffer any additional credit problems over and above our bk?

Any of your thoughts would be most appreciated. Thanks so much!

[StaciMM]

The 'how long' really depends on local laws. As I understand it, the foreclosure process varies by state. As for your credit, nothing should be updated further onces its "IIB".

[Becky C]

Have you tried to sell the house?
Do you have any equity in it?

Becky

[Minnymouth]

If you have substantial equity in the home, try selling it first.

If not and your not keeping it, quit making payments and let them foreclose on it..... sometimes takes 3-5 months before you would have to move out, sometimes longer.

If you go to buy another home with 2 or 3 years after bankruptcy, with a decent downpayment you should be able to get a reasonable interest rate again.

Since you already have a bankruptcy on your credit report, a foreclosure will not affect you all that much, I'm sure. Not 3 or 3 years down the road of good credi reporting.

Keep us posted,

Minny

[Minnymouth]

A note,
Since you did not reaffirm, REMEMBER, any time a payment is late, the bank can start foreclosure on you immediately if they want. All they have to do is wait for you to mess up on a payment....

A thought,

Minny

[spooby72]

Thanks for your thoughts!

We don't really have any equity...bought the home 1.5 years ago. With paying the realtor, we wouldn't have anything left over and that is if it even sells.

The Kansas Foreclosure Laws say it can take 120-140 days for the complete foreclosure process and there is a 3 month period of time after the foreclosure is finalized where we have the right to possess our home during a redemption period. As I understand it from there...if we were still in the house the bank can do 1 of 2 things...start an eviction process or sometimes the will pay you a cash settlement for you to vacate without the cost of the eviction.

It seems like we could possibly stay here for atleast 6-7 months and the bank may even pay us to leave....sounds kinda slimy I know but we have already taken the hit on our credit report and the money we save, $1250 per month, will go a long ways in stabilizing our future.

We have a good local rent history so we should be able to secure a decent apartment with a letter of explanation, wife can qualify on her own with good work history, money in the bank and could even pay many months ahead to make the property managers more comfortable with our low credit scores...which I have already disputed and am working on the cleanup.