If I claimed bankruptcy 3 years ago and kept my house which has a mortgage and and HELOC loan on it, can I walk away from it now?

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If I claimed bankruptcy 3 years ago and kept my house which has a mortgage and and HELOC loan on it, can I walk away from it now?

I had to take an early retirment and am getting social security and a pension. Can they attach my income? I am widowed and when I claimed bankruptcy. I never thought my position would be eliminated. My 2 mortgage payments take up 80 % of my income now. Also, can they touch my 401 K?

Asked on July 25, 2012 under Bankruptcy Law, Florida

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Before you decide to walk away from the home that you have you need to consult with a real estate attorney to see if the loans that you have are purchase money or not. If not, then you risk the possibility of a deficiency judgment if the property goes into foreclosure where your assets could be levied upon.

Your 401 k retirement account is not subject to any levy by a creditor. One option is that you may consider selling your home subject to a short sale approval by the lenders where you would not be subject to any deficiency judgment if the lenders sign off on it.

Unfortunately, your prior bankruptcy where you re-affirmed the loan for the house you have will not offer you protection in the event you walk away from your home.


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