Real Estate Attorney says.......

[Canyonguy]

[HHM]

Just keep in mind, the Real Estate Attorney is giving you "practical" advice, not "legal" advice. Also, to be frank, real estate attorney's, on average, really don't know very much about this stuff. Their practice is focused on transactions and title issues, they don't get involved that often in foreclosures or short sales and definitely know VERY LITTLE about the financial repercussions to the individual of either.

I do disagree with one aspect. If the debt is forgiven (deficiency on foreclosure), you WILL get a 1099-C and have to deal with that issue (See IRS Form 982). Deluge or not, these 1099's are pretty much auto-generated.

The attorney may be right, in the immediate future, there will be no practical consequence to simply walking away. How you proceed depends on how comfortable you are living in uncertainty. If you really want to clean up your financial life and take proactive steps to actually "improve" your situation, BK is the better choice.

[Trixie007]

Something else to keep in mind, if you have a lienholder who can sue for a deficiency (second?) - they have a long time til the SOL runs out, and they can watch your credit and see when you have money again, and sue at that time. Things will slow down eventually to the point where the lenders can pursue the "tougher" collections. This is one of the things that made us decide we have to file.

[Canyonguy]

BK Attorney says

As of now I have been told by 2 BK Attorneys that I have no deficiency so I can just walk away.
There is only a first on the property.I mentioned all that was said (except re: 1099C what does that mean to me?)on this thread. Bear in mind they could have charged me $$$ and done a BK with me
but they sound honest.

[keepmine]

If the bank sells the property and receives enough to cover the mortgage and foreclosure costs, they have no grounds to sue you.
As HHM suggested, they are being pratical. While, you could get sued if they end up with a deficency balance after the sale the reality is they'll do nothing. Lawsuits for stuff like this just aren't effective because, the debt is just so large that it can't be repaid and attempts to go legal just push the borrower into bk.
Sounds like you really have nothing anyone ca take so if that situation won't change just wait 'em out.