Which option is better for us as we would like to buy a home in the next couple of years? 16 Answers as of August 21, 2014

Filed for Chapter 7 in October 2012. Discharged in January 2013. Did not reaffirm our mortgage. Continued making mortgage payments to stay in the home. Have struggled the past year due to my commission and market downturns. Credit has improved but have struggled to make the mortgage payments the past 5 months. A deed in lieu of foreclosure, a short sale, or a standard foreclosure (and let the sheriff give us a vacate date)? Thank you for your help - we have no BK attorney (could not afford one).

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Stephens Gourley & Bywater | David A. Stephens
A short sale does the least amount of damage to your credit.
Answer Applies to: Nevada
Replied: 8/21/2014
GARCIA & GONZALES, P.C. | Richard N. Gonzales
Call a good mortgage broker.
Answer Applies to: Colorado
Replied: 8/19/2014
Ronald K. Nims LLC | Ronald K. Nims
A foreclosure is perhaps the worst thing to have on your credit record when you're trying to buy a house. While both a deed in lieu and a short sale will appear on your credit record, neither is as bad as a foreclosure. List your house for sale, generally, lenders aren't interested in either a deed in lieu or a short sale unless you've tried to sell it and pay off the mortgage.
Answer Applies to: Ohio
Replied: 8/19/2014
Tokarska Law Center
Tokarska Law Center | Kathryn U. Tokarska
I assume that you would be looking to finance the next purchase. The best people to ask this question are real estate mortgage brokers. You may want to check with several since a broker may work with certain number of lenders. They are in the best position to know what types of programs are available at any given time and the standards for qualifying for a particular program. The only route I would avoid for sure is an eviction. You are better off moving out voluntarily rather than being forced out by the sheriff. Landlords do not look kindly upon eviction and therefore it would greatly decrease your chances of finding something to rent in the meanwhile.
Answer Applies to: California
Replied: 8/19/2014
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
They all com out about the same on your credit report. You have to get the lender to agree to the deed in lieu and that can often be difficult.
Answer Applies to: California
Replied: 8/19/2014
    The Law Office of M Grater LLC
    The Law Office of M Grater LLC | Mark O. Grater
    Probably a short sale since you would not have a foreclosure on your history.
    Answer Applies to: Connecticut
    Replied: 8/19/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    Would your house be affordable if your interest rate went down a few percentage points or if the payments were spread out over a longer period of time? You ought to contact your mortgage company to see if a loan modification is possible. If not, all of your options will hurt your credit. Short sale is least damaging to your credit, deed in lieu is, surprisingly, most damaging.
    Answer Applies to: Nevada
    Replied: 8/19/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    You filed and received a discharge in bankruptcy so none of those choices will hurt your credit. The only difference is that you can not get a new mortgage to buy a house until the house you have now is out of your name for 2 years or so. To stay in the home will mean you will get time to stay for free and save money but it will slow the process when you vacate the premises to get a new home. You probably would have to rent for two years.
    Answer Applies to: New York
    Replied: 8/19/2014
    Idaho Bankruptcy Law | Paul Ross
    Don't go out of your way to assist the mortgage lender, especially if they are not willing to assist you with a modification. Only do a short sale if you stand to gain something. If you allow a standard foreclosure then you may live for a number of months virtually rent-free. Save your money and leave your home before the foreclosure date. Your facts will depend on equity and many more. Visit with an attorney regarding your options rather than only general comments that can be made here.
    Answer Applies to: Idaho
    Replied: 8/19/2014
    There could be a problem getting a mortgage on another home within 3 years from the discharge date of the bankruptcy? Since you did not sign a reaffirmation agreement the debt is discharged so you should probably not be paying the mortgage if you have decided to give up the house. Depending on state law you could have at least 9 moths (in Minnesota) to live rent/mortgage free by way of foreclosure. I do not know if a short sale or a deed in lieu of foreclosure would help you as far as the time needed from the date of the bankruptcy to get a mortgage on another home.
    Answer Applies to: Minnesota
    Replied: 8/19/2014
    William Bidwell, Attorney at Law | Bill Bidwell
    Contact the mortgage company to see if there is any way to work with you. Try to short sell the place or modify your loan. If you give deed in lieu of or short sale, make sure mortgage company will discharge any deficiency.
    Answer Applies to: Michigan
    Replied: 8/19/2014
    Dickson Law Group, LLC
    Dickson Law Group, LLC | John P. Dickson
    One possibility you should consider is defaulting on the payments and fighting the foreclosure. If defending the foreclosure extends the time you possess the house by even a year (which is not uncommon in Chicago and the suburbs), the amount that you are ahead in rent/mortgage payments you are not making could easily outweigh the value of having a foreclosure off your credit report sooner.
    Answer Applies to: Illinois
    Replied: 8/19/2014
    Law Offices of Eric W. I. Anglin
    Law Offices of Eric W. I. Anglin | Eric W. I. Anglin
    Short sale is your best option of the three you listed.
    Answer Applies to: Indiana
    Replied: 8/19/2014
    Thomas Vogele & Associates, APC | Thomas A. Vogele
    First, your bankruptcy will stay on your credit for ten years so buying a home in a couple of years is probably a stretch. In addition, if your income is variable, committing to a fixed payment like a mortgage is not ideal. Since you did not reaffirm the mortgage, call up the bank and tell them you are interested in their cash for keys program. Make sure they transfer title from your names to the bank so you get off the hook for taxes, etc. Good luck.
    Answer Applies to: California
    Replied: 8/19/2014
    Garner Law Office
    Garner Law Office | Daniel Garner
    A foreclosure is as bad a black mark as a bankruptcy on your credit report, so if you can do the deed in lieu of foreclosure or a short sale, either one would be better than a foreclosure. It may still be difficult for you to get another mortgage for several years no matter what you do, however, so be sure to explore all possible options for a loan modification to make your current home more affordable. Your mortgage lender is required to inform you of all available programs for mortgage assistance.
    Answer Applies to: Oregon
    Replied: 8/19/2014
    Law Offices of Linda Rose Fessler | Linda Fessler
    You could also probably file a lawsuit against the bank. There are few that are blame free. Then you could probably stay in the home for a few more years rent free. Combine that with a request for a modification and you could probably stay for an additional year.
    Answer Applies to: California
    Replied: 8/19/2014
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