If we did not reaffirm on mortgage after filing Chapter 7 Bankruptcy, can we walk away from the mortgage? 33 Answers as of June 28, 2013

After filling Chapter 7 Bankruptcy in 2009 we did not reaffirm our mortgage, and kept living in the house by making the monthly payments. This is 2012 and we would like to know if we can just stop paying on the house and walk away from this mortgage? Would we get garnished or be in legal trouble for doing that? If not, how long, more or less, do we have to live in the house without making any payments?

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Debt Relief Law Center | Roger J. Bus
Yes, you can walk away at any time if you did not reaffirm.

Also, the house still must be foreclosed on before you could be forced to move out- so you still have many months available to live there without making payments.
Answer Applies to: Michigan
Replied: 8/15/2012
Burton Green, Attorney | Burton Green
If you did not reaffirm the mortgage debt the lender cannot come after you if you stop paying the mortgage. The lender can file foreclosure in order to have the house sold.

You can continue to live in the house until the house is sold at the foreclosure sale.

Be aware that if there are homeowner or condo fees being assessed, you are still liable for such fees owing after the date that you filed until title to the home is out of your name.
Answer Applies to: Florida
Replied: 8/15/2012
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Yes, you can walk away. The bankruptcy dissolved your obligation to pay. You can also stay in it until they boot you out.
Answer Applies to: California
Replied: 8/14/2012
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE). | Gary Lee Lane
Absent fraud yes.
Answer Applies to: California
Replied: 6/28/2013
Law Office of Jeffrey Solomon
Law Office of Jeffrey Solomon | Jeffrey Solomon
Yes, you can walk away and not owe the mortgage a dime. A foreclosure in Florida can take a long time.
Answer Applies to: Florida
Replied: 8/14/2012
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    If you signed no reaffirmation agreement then you owe no money under the note on the house so that you could just stop paying with no personal liability. The time you have in your house depends on where in NY you reside, but if you also use an attorney to defend a foreclosure action you should be able to get 3 years at least without paying a mortgage payment.
    Answer Applies to: New York
    Replied: 8/13/2012
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Your personal liability has been discharged in the chapter 7. You do not owe anything but the lender has its security interest in the property and can foreclose. The foreclosure process takes a minimum of 110 days. You can live there until the completion of the foreclosure. After the foreclosure you will not be garnished or have legal trouble for having stayed there rent free.
    Answer Applies to: California
    Replied: 8/13/2012
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    You can make arrangements with the bank for voluntary surrender and simply "walk away" from the mortgage without needing to worry anymore about it.
    Answer Applies to: Indiana
    Replied: 8/13/2012
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Debts which were incurred prior to filing and where the creditor was provided notice of the bankruptcy filing are discharged unless they were reaffirmed. Since you did not reaffirm, the discharge applies to this debt and you can walk away without any obligation to the mortgage lender.
    Answer Applies to: California
    Replied: 8/15/2012
    Bjork Law Office
    Bjork Law Office | Attorney John P. Bjork
    Yes. You can stop making payments and let the house go into foreclosure. You shouldn't owe any money and you can live in the house during the foreclosure without making payments.
    Answer Applies to: Wisconsin
    Replied: 8/8/2012
    Alvin Lundgren | Alvin Lundgren
    Yes. You cannot be garnished.
    Answer Applies to: Utah
    Replied: 6/28/2013
    Harkess Law Offices | Nancy Harkess
    As you did not reaffirm your mortgage, technically you no longer have the debt. However, it's a good idea to contact the lender to see if you are able to short sale the property. Just walking away is the worst thing you can do. If you are able to short sell the property, make sure you will not be liable for a deficiency (the difference between what you owe and what the property eventually sells for). As you don' really have the debt any longer because it was eliminated in the bankruptcy, you should be able to do this. You will have to list the house in order to short sale it - make sure you find a Realtor who is experienced in short sales. Also, ask the lender for "cash for keys." If they agree and you leave the house in "broom swept" condition (not pristine but no trash or damage), you may receive $1,000 or more to help you with the eventual move.
    Answer Applies to: Nevada
    Replied: 8/13/2012
    Attorney At Law | Harry D. Roth
    Yes. You could walk away from the first mortgage whether or not you filed bankruptcy.
    Answer Applies to: California
    Replied: 8/13/2012
    Bruning & Associates, PC
    Bruning & Associates, PC | Kevin Bruning
    If what you say is true and you have not reaffirmed the mortgage, or done anything else to resume personal liability on the loan (e.g. refinancing or something like that), you should be able to walk away from the mortgage without concern of a deficiency judgment being levied against you if you received a discharge in your Chapter 7 case. The length of time you have in your home varies greatly depending on your bank and the law firm the bank has hired to do the foreclosure suit; an experienced foreclosure defense attorney may be able to extend the time you have in your home for a reasonable fee well below what you would save in the time period it takes for the foreclosure to finish. Often, though, the process will take between nine months to a year in Illinois without interference.
    Answer Applies to: Illinois
    Replied: 8/13/2012
    Scott Goldstein | Scott Goldstein
    If you did not reaffirm, your personal liability is gone. Therefore if you stop paying and the bank forecloses, you cannot be personally sued for the damages or shortfall. You should always keep the property insured, though, since if someone falls and hurts themselves, you will still be on the hook. As to the final part, foreclosure currently takes about 2-3 years to complete these days in NJ.
    Answer Applies to: New Jersey
    Replied: 8/13/2012
    Benson Law Firm
    Benson Law Firm | David Benson
    Generally speaking, a personal obligation on a mortgage loan is discharged in Chapter 7 unless the debt is reaffirmed.
    Answer Applies to: Ohio
    Replied: 8/13/2012
    John C. Schleiffarth, P.C. | John C. Schleiffarth
    Generally speaking, when a debtor does not reaffirm on a loan and that loan is discharged in bankruptcy, a debtor may continue to make payments to avoid foreclosure or repossession. If the debtor later decides to stop paying, they are not subject to a contract. A debtor could, for example, let a home go to foreclosure post-bankruptcy. The debtor would not have any liability on the discharged home loan. For specific legal advice, I suggest you meet with a bankruptcy attorney who can review your situation in its entirety.
    Answer Applies to: Missouri
    Replied: 8/13/2012
    Ross Smith, Attorney at Law
    Ross Smith, Attorney at Law | Charles Ross Smith III
    Yes. If you did not reaffirm, you can simply walk away from the house. You should send a note to the mortgage holder, when you actually vacate, and keep a copy. You may not remove fixtures (toilets, light fixtures, etc.) from the house. You also do not need to clean like you would for a landlord. There will eventually be a foreclosuresuit against the home, but no cash deficiency against you. Were I you, I would consider stopping the mortgage paymentsnow and living in home as long as possible. It can take a year or more to foreclose in some Ohio counties. In the meantime, save up all of your payments for moving expenses and a rent to own home, maybe. Good luck.
    Answer Applies to: Ohio
    Replied: 8/13/2012
    Olson Law Firm | Edward M Olson
    If the loan was discharged in the bankruptcy... then you can walk away from the house. They can foreclose on the house... but they cannot chase you for any deficiency.
    Answer Applies to: Michigan
    Replied: 8/13/2012
    Law Office of J. Thomas Black, P.C.
    Law Office of J. Thomas Black, P.C. | J. Thomas Black
    Yes, so long as you did not sign a Reaffirmation Agreement during the Chapter 7 bankruptcy, the mortgage is discharged and you cannot be sued for not paying any balance due, even if you "walkaway" from the house now, years later. So no, you could not be sued or garnished for doing that. If the lender were to try to collect money from you, your bankruptcy attorney could bring an action in Bankruptcy Court to have them punished for violating the discharge injunction provided by federal law, 11 U.S.C. Sections 727 and 524. You own the house until a foreclosure sale actually takes place. Here in Texas, once you stop paying payments, it can take anywhere from two to six months, or possibly longer, before a foreclosure sale would actually take place. You should pick up your certified mail so that you know for sure when your house is "posted" for foreclosure. Here in Texas, it must be on the first Tuesday of a given month, and there are other requirements. However, the mortgage company will likely report that they conducted a foreclosure on your credit reports, and my understanding is that it can stay on your credit for 7 years. Also, you may not be able to purchase another house for a certain number of years after the foreclosure, depending on the lender's guidelines.
    Answer Applies to: Texas
    Replied: 8/13/2012
    Law Office of D.L. Drain, P.A.
    Law Office of D.L. Drain, P.A. | Diane L. Drain
    You are fine so long as you did not reaffirm the debt(s) on your home. Make sure to keep any HOA current until the house is foreclosed. This foreclosure could take several months to a few years, there is no way of predicting. My best to you.
    Answer Applies to: Arizona
    Replied: 8/13/2012
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    If you are sure you did not reaffirm it, you can walk away with fear of them garnishing you or trying to collect from you. You should be aware though that as of the end of 2012 the law that says that the IRS will not expect you to pay income tax on the amount of the mortgage forgiven ends. Right now we do not know whether or not it will be extended or not. Basically that means if the mortgage company sends you a 1099, for example, for $50,000 in debt forgiveness (the difference between what you owe the mortgage company and what they sell your house for) you will have to pay income tax on that money. Hopefully the law will be extended, but as of right now it is up in the air. You can live in the house for six months after the Sheriff's Sale (the actual foreclosure). There is no way to know how long it will take for your mortgage company to foreclose. Some never foreclose, some get on it as soon as you have missed a couple of payments since you have already discharged the debt in your bankruptcy. Good Luck!
    Answer Applies to: Michigan
    Replied: 8/13/2012
    Stephens Gourley & Bywater | David A. Stephens
    If you did not reaffirm and have not affirmatively damaged the home you can walk away without further personal liability. There will be a foreclosure on your credit report.
    Answer Applies to: Nevada
    Replied: 8/13/2012
    Weber & Phillips, P.A.
    Weber & Phillips, P.A. | John G. Phillips
    If you did not sign a reaffirmation agreement, then the debt should be discharged. It sounds like there is a very good chance you can walk away without any claim against you, but please consult a local attorney for specific advice because I cannot provide that for you in this type of forum.
    Answer Applies to: Arkansas
    Replied: 8/13/2012
    Steven Harrell, Attorney at Law | Waymon Steven Harrell
    Yes, if the debt was not reaffirmed with the lender.
    Answer Applies to: Georgia
    Replied: 8/13/2012
    Law Office of Stuart M. Nachbar, P.C.
    Law Office of Stuart M. Nachbar, P.C. | Stuart M. Nachbar
    If you did not reaffirm, yes you can walk away and they can foreclose on the Property. Your personal obligation on the Mtg would not be effect as the bankruptcy would have discharged it. You would probably have about a year in the property.
    Answer Applies to: New Jersey
    Replied: 8/6/2012
    John A. Ferguell P.S. | John Ferguell
    If it is a first mortgage, the bank's only recourse is to foreclose if they do it non judicially. This is the typical route. You may be able to stay in the house for a year or more as even a fast foreclosure process takes a year. They can't come after you for any deficiency on a first mortgage.
    Answer Applies to: Washington
    Replied: 8/13/2012
    David Andersen & Associates PC | Jeremy Shephard
    Yes, you can discontinue payments without any personal liability. Remember, you get a 6-month redemption period from the foreclosure sale before you have to move out.
    Answer Applies to: Michigan
    Replied: 8/13/2012
    R. Jason de Groot, P.A
    R. Jason de Groot, P.A | R. Jason de Groot
    If you did not reaffirm the mortgage, that particular debt is forgiven and you can walk away. You could have many months in the home before foreclosure procedings are filed.
    Answer Applies to: Florida
    Replied: 8/13/2012
    Law Office of L. Paul Zahn
    Law Office of L. Paul Zahn | Paul Zahn
    You can walk away from the house without penalty.
    Answer Applies to: California
    Replied: 8/13/2012
    Law Office of Bernal Peter Ojeda | Bernal Peter Ojeda
    You can walk away but you need to surrender the house.
    Answer Applies to: California
    Replied: 8/13/2012
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    You can walk with no liability since house was included in your BK.
    Answer Applies to: California
    Replied: 8/13/2012
    Steven Alpers | Steven Alpers
    I can only tell you that the mortgage company would have to give you a 90 day notice and then a 20 day notice before the sale of your house. Maybe you should consider talking to an agent, maybe the one who helped you buy the house, to see about the possibility of a short sale. The mortgage company cannot go after you personally, the took the house and land as security for their loan so they could only take the house and sell it. By the way if you can do a short sale you should be able to get at least $3,000 for moving expenses.
    Answer Applies to: California
    Replied: 8/13/2012
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