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Would our Credit Score drop if we leave the chapter 7 discharged property after living there for 2 years since?

Suwanee, GA |

We have been making payments interest only for more than 2 years, more like renting the property. The property value has decreased more than 35% but would the same mortgage company deal with us to make a new mortgage loan to reflect the lesser value? Stuck in limbo, not sure what to do.

Attorney Answers 7


  1. Best answer

    No, it will not. Since it was discharged, the only negative effect is that the mortgage company will eventually foreclose on the property. This will not affect your credit score, but many mortgage companies will not give you a mortgage on a new house until a year has passed since the foreclosure date. Also, you will have to pay any HOA fees until the foreclosure, and you need to take steps to make sure there is valid insurance on the property until then as well.

    The above information is general in nature. In order to obtain more specific and legal advice upon which to base your important decisions, please contact our office directly for a free phone or in person consultation. Robert M. Gardner, Jr. Hicks, Massey & Gardner, LLP hmgrmg@yahoo.com 53 W. Candler St. Or 718 Oak St. Winder, Ga. 30680 Gainesville, Georgia (770) 307-4899 (770) 538-0555 gadebtlaw.com hicksmasseyandgardner.com serving metro Atlanta and all of Northeast Georgia Bankruptcy, Divorce, Personal Injury, Worker’s Compensation, Medical Malpractice, Adoption, Civil and Criminal Litigation


  2. You're asking two separate questions in one.

    First, will your credit score drop? My answer is, is your credit score improving? Most bank's don't report that you're making payments, so they can't report that you're not. Find this out and you find your answer.

    The second question, can you get a loan mod? Maybe. Discuss this with your bank.

    The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here. Please visit my web site: www.avanesianlaw.com for more information about my services.


  3. I don't believe your score will "drop" since the bankruptcy already took care of that and wiped out the delinquent scores anyway. I do not, however, believe your score has risen because of your continued payments since the debt obligation was discharged, and the bank stopped reporting on your payments anyway. I doubt you'll get a loan mod since (a) your loan obligation was eliminated, and (b) the bank will probably not want to deal with you anyway. You can always, however, inquire.

    We can be reached at 507.334.0155 (Toll Free: 888.777.5009). Our web address is: www. corbin-law-office.com. Answers on Avvo are not to be considered a response to a specific legal issue in a specific jurisdiction - they are to be considered only general responses to hypothetical scenarios posed by the questioner. For specific legal advice, please consult with a licensed attorney in your jurisdiction. No information contained herein should be construed as a solicitation for business, an offer to perform legal services in any jurisdiction in which the attorneys of Corbin Law Office are not licensed, or the dissemination of legal advice. No creation of an attorney-client relationship should be assumed or implied. We are a debt relief agency. Corbin Law Office helps people file for bankruptcy relief under the bankruptcy code.


  4. No, leaving the property will not effect your credit report since you do not have a mortgage or owe anyone money. You may be liable for HOA fees (if you have a homeowner's association) and should consider keeping current homeowners insurance on the property until the house is out of your name. An attorney can help with that.

    The DiGiulio Law Firm, LLC. Phone: 888-540-4529 Website: www.atl-law.com Atlanta, Marietta, Lawrencevile, Duluth, Alpharetta, Buckhead The above answer is for general information purposes and is offered as a service to the public. Nothing on this or associated pages, documents, comments, answers, reviews or other communications, including the above post, should be taken as legal advice for any individual case or situation or relied upon as a substitute for engaging legal counsel, nor does it constitute advertising or a solicitation. Viewing the general information here, including your receipt or transmission of information hereof does not alone create or constitute an attorney-client relationship or ensure confidentiality. Please contact 770-309-9551 for additional questions or to schedule for your free phone consultation. If this question or answer pertains to bankruptcy, please be advised that we are a federal debt relief agency. One of our areas of practice is to help people file for bankruptcy relief and protection under the U.S. Bankruptcy Code.


  5. Since the debt was discharged, moving should not alter your credit score. You can seek a modification, but may or may not acheive the particular modification you seek.

    If you find this answer helpful, please mark it here on AVVO as helpful. In answering you, I am attempting to communicate general legal information and am not representing you (and am not your lawyer). Do feel free to call me at 404-768-3509 if you wish to discuss actual representation (the phone call also does not retain counsel; that requires an office visit and appropriate paperwork). In that a forum such as this provides me with limited details and doesn't allow me to review details and documents, it is possible that answers here, while meant to be helpful, may in some cases not be complete or accurate, and I highly recommend that you retain legal counsel rather than rely on the answers here. (You can also email my office at geaatl@msn.com . An email also does not retain my office, but can help you get an appointment set if you prefer not to call). I am happy to discuss possible representation with you. Any information in this communication is for discussion purposes only, and is not offered as legal advice. There is no right to rely on the information contained in this communication and no attorney-client relationship is formed. Nothing in my answer should be considered as tax-advice. To ensure compliance with IRS Circular 230, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein. I am also required to advise you, if your question concerns bankruptcy, that the U.S. Congress has designated Ashman Law Office as a debt relief agency that can help people file bankruptcy.


  6. I agree with my colleagues. However, you should request a statement of payment history from your lender and then send that to the credit bureaus so that your mortgage payment history is reported.


  7. If you are simply leaving the property, your credit score should not be impacted. You might, however, be liable for HOA charges and other items that you have obligated yourselves to pay--things like bills, etc.

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