I filed Ch 7 bankruptcy in April 2018, condo mortgage was included. Trustee abandoned property in Mar 2019 due to financial burden on court, property was not able to sell due to significant depreciation of property value. HOA fees continued to assess (unfortunately my attorney did not fully advise me of how to handle this) and now over a year later the HOA filed a lien on property due to non pymt. I recently contacted the bank for deed in lieu request as they had not begun the foreclosure process. Bank approved deed in lieu and was able to settle pymt with HOA to release lien. Process is still undergoing. But, I am wondering if doing a deed in lieu will also be reported on my credit in inaddition to the mortgage loan bankruptcy that was reported? If so, how much could it impact? Are they any other ramifications to deed in lieu that I am unaware of? Thank you so much for your professional response.
Unfortunately, the answer to your questions is truly: You'll just have to wait and see. There are really no clear guidelines as to what the HOA or the Mortgage/Bank are goint to ultimately report to the Credit Bureaus. Since you were obviously working with the Mortgage/Bank to resolve this situation, it is possible that they will treat you fairly, and will not report the situation any further to the Credit Reporting Agencies. This could have, and should have, been included in the negotiation phase for the Deed in Lieu; that way you would have known they would not be reporting it. The good news is that you do have the opportunity in the event there are further reports to your Credit to file a "Consumer Statement" to explain that all of the various entries are duplicates of each other since you filed the Bankruptcy with the intention to surrender the property.
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