- Jurisdiction
- Illinois
Hi,
I'm 91 and live in Illinois. I filed for Bankruptcy relief from medical bills in 2010. My condo was discharged in bankruptcy court however, I still live in it and pay the mortgage even though technically, I am not liable for the mortgage and can walk away at any time (or so I was told). I've chosen to stay and continue paying the mortgage because it is cheaper than renting a comparable place.
The problem is, the condo is currently worth LESS than the mortgage, so it has negative equity. I would like to move to AZ to be near my son and live in an independent living facility. My concern is that I may need assisted living within 5 years and it's my understanding that if I transfer the condo (even though it has negative value now) I will not be eligible for financial aid.
If I make it 5 years or pass away without ever needing assisted living it seems silly to walk away and let the bank foreclose, or to short sell, because my son or family member can immediately lease the unit will have a positive cash flow (which would help pay my new place in an independent facility and the mortgage would eventually be paid off and I can leave the unit to them.
So the only scenario where it would make sense to walk away is if a). I make it another 5 years in independent living, and b). Require assisted living after 5 years. I'm not sure how to calculate this risk or what my options are. Can I quit claim the property now even though it's been discharged in bankruptcy court and there is still a mortgage on the unit that I'm not liable for? If I walk away and the bank forecloses, do I have to list it as an asset I transferred within 5 years even though it had negative equity when I transferred or walked away? Maybe the simplest way to ask my question is if a property with negative value is still considered an asset?
Thank you so much if anyone can help me with an answer
I'm 91 and live in Illinois. I filed for Bankruptcy relief from medical bills in 2010. My condo was discharged in bankruptcy court however, I still live in it and pay the mortgage even though technically, I am not liable for the mortgage and can walk away at any time (or so I was told). I've chosen to stay and continue paying the mortgage because it is cheaper than renting a comparable place.
The problem is, the condo is currently worth LESS than the mortgage, so it has negative equity. I would like to move to AZ to be near my son and live in an independent living facility. My concern is that I may need assisted living within 5 years and it's my understanding that if I transfer the condo (even though it has negative value now) I will not be eligible for financial aid.
If I make it 5 years or pass away without ever needing assisted living it seems silly to walk away and let the bank foreclose, or to short sell, because my son or family member can immediately lease the unit will have a positive cash flow (which would help pay my new place in an independent facility and the mortgage would eventually be paid off and I can leave the unit to them.
So the only scenario where it would make sense to walk away is if a). I make it another 5 years in independent living, and b). Require assisted living after 5 years. I'm not sure how to calculate this risk or what my options are. Can I quit claim the property now even though it's been discharged in bankruptcy court and there is still a mortgage on the unit that I'm not liable for? If I walk away and the bank forecloses, do I have to list it as an asset I transferred within 5 years even though it had negative equity when I transferred or walked away? Maybe the simplest way to ask my question is if a property with negative value is still considered an asset?
Thank you so much if anyone can help me with an answer