What happens with a deed in lieu after a chapter 7 bankruptcy? 11 Answers as of May 22, 2012

My BK7 was discharged in Jan 2011, and my mortgage was not reaffirmed.
In Oct 2011 I dedided to no longer continue to make the payments on my upside down mortgage, BOA has not reported any negative marks on my credit since the debt was discharged and not reaffirmed. It shows on my credit report as "Discharged, Included In Bankruptcy", and $0 balance, but not closed. I'm considering accepting a Deed in Lieu of Foreclosure offer from BOA, and I'm curious of how this will affect my credit. BOA has stated that they will report as "settled", or "Paid Settlement", which is better than foreclosed, but not much better. It would still take me out of purchasing a home for 3 more years. Is the lender, BOA, legally allowed to report "Settled" or "Deed in Lieu" on a discharged debt, considering that it would be another negative mark? My understanding is that the creditor cannot post any negative remarks after the debt has been discharged.

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Dan Wilson Bankruptcy
Dan Wilson Bankruptcy | Dan Wilson
If you want to you can just walk away from the house. If it makes you feel better do a deed in lieu go ahead. An accurate report to credit reporting agencies is not a violation of the stay.
Answer Applies to: Colorado
Replied: 5/22/2012
Alvin Lundgren | Alvin Lundgren
Tell BoA the debt was discharged in bankruptcy. However, they still need a title to your home therefore will either get a Deed in Lieu from you or will foreclose. Sign the deed in lieu is the better way.
Answer Applies to: Utah
Replied: 5/21/2012
Diefer Law Group, P.C.
Diefer Law Group, P.C. | Abel Fernandez
Yes, the bank can report it as foreclosed. You don't owe the money but the only way to clear title is to foreclose or for you to give up the deed.
Answer Applies to: California
Replied: 5/21/2012
J. R. Matthews LLC | J. R. Matthews
Generally speaking, a creditor can report the truthful, factual status of the debt.
Answer Applies to: Oklahoma
Replied: 5/21/2012
Law Office of D.L. Drain, P.A.
Law Office of D.L. Drain, P.A. | Diane L. Drain
There is no way to predict how this will affect your credit. The more important question is will signing a deed in lieu open the door for the lender to be able to sue you? Your discharge closed that door, but any new contract after the bankruptcy may re-obligate you for some or all of the debt. I don't recommend to my own clients that they do either a deed in lieu or a short sale after they file for bankruptcy protection. Instead I tell them to let the property foreclose.
Answer Applies to: Arizona
Replied: 5/21/2012
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    You personally do not owe on the mortgage anymore. The lender can only look to the property to satisfy it's debt. It may foreclose, which would accurately be reported as a foreclosure because that is what happened. A deed in lieu is better, so that is probably the best alternative.
    Answer Applies to: California
    Replied: 5/18/2012
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    It will not change your credit at all and you should be able to get a mortgage from 2 to 2.5 years after your discharge if you already gave the house back to the lender. There is no effect to your credit report.
    Answer Applies to: New York
    Replied: 5/18/2012
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    They can post what actually occurred, it doesn't just magically go away just because you don't owe it anymore. The debt was discharged in bankruptcy, which is true and is the reason why you do not owe it anymore, but is a negative. A settled or a Deed in Lieu is better than discharged in bankruptcy. If that is what you do, then that is true, and it will be a better entry than discharged in bankruptcy.
    Answer Applies to: California
    Replied: 5/18/2012
    R. Jason de Groot, P.A
    R. Jason de Groot, P.A | R. Jason de Groot
    This is a good example of why people should not reaffirm the mortgage in a chapter 7. The debt was discharged and BOA cannot come after you on that debt. Marking it as "settled" or "paid settlement" should not affect your credit, which has already been damaged by filing bankruptcy. The credit you are able to get afterward is dependent upon the lending practices of the institutions you apply to. They can be assured that you will not be filing bkr for another approximate 7 years. Use that to your advantage.
    Answer Applies to: Florida
    Replied: 5/18/2012
    Michael Schwartz
    Michael Schwartz | Michael Schwartz
    Unless you own a Condo or COOP or house in a community that charges maintenance fees, there is no reason to do anything about the house. You are done with the lender. Let them foreclose and live there rent free until the place is sold.
    Answer Applies to: New York
    Replied: 5/18/2012
    Law Office of Pho Ethan Tran PLLC
    Law Office of Pho Ethan Tran PLLC | Pho Ethan Tran
    If the mortgage was not reaffirmed and discharged in 2011, you are no longer legally liable for that debt.
    Answer Applies to: Texas
    Replied: 5/18/2012
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