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

Asked over 1 year ago - 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. Ashley Anne Digiulio

    Pro

    Contributor Level 16

    7

    Lawyers agree

    1

    Answered . 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,... more
  2. Michael J Corbin

    Contributor Level 20

    8

    Lawyers agree

    1

    Answered . 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.... more
  3. Glen Edward Ashman

    Pro

    Contributor Level 20

    6

    Lawyers agree

    1

    Answered . 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... more
  4. Robert M. Gardner Jr.

    Pro

    Contributor Level 18

    3

    Lawyers agree

    Best Answer
    chosen by asker

    Answered . 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... more
  5. Michael Avanesian

    Pro

    Contributor Level 16

    6

    Lawyers agree

    1

    Answered . 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... more
  6. William Harvey Sherman

    Contributor Level 4

    3

    Lawyers agree

    Answered . 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.

  7. Joseph Ryan

    Contributor Level 12

    3

    Lawyers agree

    1

    Answered . 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.

Related Topics

Bankruptcy

Bankruptcy is a legal way for people or businesses who are no longer capable of paying back their bills to clear these debts and start over.

Chapter 7 bankruptcy

Chapter 7 bankruptcy is a form of bankruptcy where your debts are canceled, but some of your assets are sold to pay off part of your debt.

Stephen M. Dunne

What is Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy wipes out ("discharges") your debts. Chapter 7 is the bankruptcy provision most frequently used by individuals. It involves the complete liquidation of a debtor's... more

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 

Ask now

21,098 answers this week

2,687 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

21,098 answers this week

2,687 attorneys answering