Murdock, FL Bankruptcy Law Firms & Lawyers

It appears bankruptcy might be your only real option. But even it costs money. Visit with an attorney to see if the judgment is such a nature that it can be resolved and removed in bankruptcy.

If the loan in question was a purchase money loan (that is a loan used to purchase the property), the lender cannot collect a deficiency (the difference between the sale price of the property and what is owed). If the foreclosure is non-judicial (sale of the property on the courthouse steps), the law does not allow for a deficiency whether the loan is purchase money or not. If the loan is not purchase money and the foreclosure is judicial (the lender files a law suit), a deficiency can be claimed by the lender. Typically, the exposure that borrowers have is liability for sold-out seconds (junior loans that are wiped out by the foreclosure of the senior loan). Once again, if the loan (the junior loan, in this case) is a purchase money loan, there is no claim for deficiency allowed. If the junior loan was a refinance or was made for something other than purchase of the property, the debt becomes unsecured (just like a big credit card bill) and the lender could sue you to collect it.

The fact that you have moved out of your house would not prevent you from filing bankruptcy. However, ust because you have moved out of your house, your potential liability has not ended. As long as you are on title, you should make sure that you maintain liability insurance on the property. Should someone be injured on your property, you would be liable. If this injury were to happen after you filed a bankruptcy petition, the liability would not be included in your bankruptcy. Also, if you have homeowners' association assessments, the assessments after your bankruptcy filing would not be discharged and would continue to accrue as long as you are on title. You should seek counsel to make sure that you are not creating a larger problem for yourselves.