Saturday, February 7, 2015

Deficiency after Deed-in-Lieu of Foreclosure on Property Discharged in Chapter 7 Bankruptcy

Question: I would like to do a deed-in-lieu of foreclosure on my property, which has already been discharged in a Chapter 7 bankruptcy. Since I can’t afford the costs and maintenance of the property anymore, I would like to give it back to the bank sooner rather than waiting for a foreclosure sale. Would there be a deficiency judgment or any tax consequences for me if the bank files a 1099 and writes off a loss? If yes, how much would that deficiency be?

Response: Generally, once the bankruptcy gets discharged, your debts are extinguished. If you were not doing the deed-in-lieu of foreclosure, the bank could still pursue their foreclosure action but your personal liability of the debt would be gone, meaning they would not come after you for the deficiency. Since you are doing the deed-in-lieu, you should not worry about the deficiency.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.
Copyright © 2015 Law Office of Svetlana Kaplun, P.C.

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Obtaining Mortgage after Foreclosing on Property Discharged in Chapter 7 Bankruptcy

Question: I own a property that was part of a Chapter 7 bankruptcy discharged over five years ago. We decided to keep the property but never reaffirmed the mortgage. Attached to the property is a U.S. Small Business Administration (SBA) lien from a bank. Between the first mortgage and the lien there is zero equity in this home and there would not be enough to fully satisfy the second lien. If I were to foreclose on this property, how would that effect my credit? Would I be able to get a mortgage to purchase another property in the future?

Response: Your credit is already ruined from having filed for bankruptcy. I doubt until your credit restores from bankruptcy you will be able to get a mortgage. Obviously foreclosure never looks good on the credit report. You can mitigate your damages though by either doing a short sale or a deed-in-lieu of foreclosure but as far as credit is concerned, you shouldn’t really worry. In due time, you will be able to recover and get another mortgage.

As a New York State Licensed Real Estate Broker, Attorney Svetlana Kaplun has the expertise to assist interested homeowners in all steps of the short sale process including: bank negotiation and short sale approval, property listing and sale.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.
Copyright © 2015 Law Office of Svetlana Kaplun, P.C.

modification, making home affordable, hamp, mortgage modification, harp refinance, making homes affordable, modifications, home affordable modification program, home affordable refinance program, hamp program, home loan modification, loan modification guidelines, foreclosures, foreclosure listings, foreclosure homes, mers, foreclosure settlement, foreclosure homes for sale, free foreclosure listings, foreclosure home, deed in lieu of foreclosure, foreclosure process, how foreclosure works, home foreclosure, foreclosure radar, bank foreclosure, home foreclosures, foreclosure listing, hud foreclosure, foreclosure laws, short sale vs foreclosure, stop foreclosure, totally free foreclosure home listings, foreclosure help, free government home foreclosure listing, free listing foreclosure home sale, free foreclosure listings with pictures, fannie mae foreclosure, independent foreclosure review, lawyers, power of attorney, personal injury attorney, attorneys, power of attorney form, durable power of attorney, power of attorney forms, criminal attorney, attorney search, medical power of attorney, free power of attorney, bankruptcy attorney, power of attorney template, power of attorney form download, durable power of attorney form, free power of attorney forms, general power of attorney, free printable power attorney form, lasting power of attorney, tax attorney, free power attorney forms, divorce attorney, ace attorney, disability attorney, attorney jobs, enduring power of attorney, attorney at law, patent attorney, free power of attorney forms to print, real estate attorney, injury lawyer, personal injury lawyer, defense lawyer, criminal defense lawyer, the lawyer, accident lawyer, a lawyer, criminal lawyer, motorcycle accident lawyer, rocket lawyer, bankruptcy lawyer, divorce lawyer, ask a lawyer, find a lawyer, lawyer referral, car accident lawyer, family lawyer, lawyer search, lawyer find, lawyer ratings, lawyer referral service, immigration lawyer, dui lawyer