Legal Question in Bankruptcy in California

We do not qualify under federal guidelines for a short sale as our income: mortgage ratio is closer to 20% than 31%. But we need to get out from under our house, and it is currently valued at $65, 000 below our remaining mortgate amount of $245,000. We cannot save, break even, etc. and we have another child heading to college in just 2 years, we would like to relocate, and I'm looking at transitioning careers. The house being underwater has us stuck. My father in law has offered to buy a house at current market which we would then rent from him, which would help us out a lot! Not sure what to do: walk away? attempt short sale? please help!


Asked on 4/11/12, 8:10 am

1 Answer from Attorneys
Michael Grennier Grennier Law, PC - #1 Bankruptcy Filing Attorney in Ventura County

You are like many, many home owners in California. Upside down on your home and no way out... at least that is what the mortgage company would have you think. If it is the principal first money trust deed of your primary residence, there is no deficiency judgment in California anyhow. You are also able to file for Chapter 7 and walk away or short the property and have no liability. Shorting the property would allow you to stay for an extended period of time renbt-free and possibly walk away with a few thousand at closing. If you would like more information, please visit my web site at: nopainbk.com

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Answered on 6/19/12, 4:45 pm


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