Personal Bankruptcy Giving back a home that was not Re-affirmed

[kylabgeek]

Hello. My husband and I went through a Chapter 7 bankruptcy in 2012. We did not find out till after the fact that our house was not re-affirmed. We also found out to re-affirm in that we would have to re-open our case. We chose not to do that because of a very bad experience with this lawyer, and basically, the judge didn't care for him and we were afraid that would hurt our case.

So, we decided to just pay on the house till our credit was better and then re-finance the home. We were current at the time of the bankruptcy and are still current. Now, here is the question. Due to some discoveries on my part in the last couple months am afraid a divorce is in my future. My husband has started many home improvements and not finished, leaving a home that I do not believe can be sold for what we owe on it.

Since the house is not re-affirmed, would we take another credit hit if we just gave back the house if we divorced? I would like to keep it, but I do not think my husband or I could afford it on a single income. It's a larger home we purchased when we first got married since we are a blended family with 5 kids.

Thanks for any advice or input to the situation.

Kylabgeek

 

[army judge]

Your question is complex for many reasons.
The major one is that I don't know all of the details of your BK.
My answer is generalized.
If things are as you posit, yes you SHOULD both be bale to just walk away from the mortgage.
Alas, we all know things are never as easy as they seem or as we might suspect.
If i were in your situation, I'd visit two or three local lawyers and ask the questions you did here.
Why do I suggest that?
Well, you want to know the credentials of anyone offering you credit, tax, or legal advice that could impact your finances.
Secondly, take your BK documents so the lawyers could review them.
You certainly don't want such sensitive information floating around the internet.
Lastly, most lawyers offer an initial consultation at no charge.
But, even if you had to spend $500 for an hour of a good lawyer's time, its worth it.

One more hting, why not discuss your intentions with the lender who holds the paper on your home?
Many lenders will work with you as you transition and prepare to sell the home, especially if you never reaffirmed the mortgage!!!!

 

[disagreeable]

You do not own the home beyond the lenders lien interest. Both of you are free to walk away if the bankruptcy was correctly handled.