Legal Question in Bankruptcy in Florida

Re: Will my credit be affected by by walking away from

You're in a tricky spot. As you already understand, the bankruptcy discharge extinguished your personal liability for the mortgage, UNLESS you reaffirmed the debt. While it is becoming more common for lenders to be slow to eject former homeowners from houses surrendered in bankruptcy due to the current economic times, that was not the case in 2005. So, you need to absolutely sure that you did not reaffirm the debt during the bankruptcy. If you reaffirmed, then the bankruptcy had no effect on the mortgage, and you would be liable for the mortgage. If you did not reaffirm, then your personal liability would have been extinguished at discharge.

What makes your situation particularly unusual is what the creditor may have been doing since your discharge. If your mortgage lender has been reporting your mortgage as paid as agreed/current on your credit bureau report since your discharge, then this would have significantly helped your credit recovery. If you walk, the lender will most likely report the default, simply for the fact that it may be reporting to the bureau due to an internal oversight.

Legally, the lender should not report the default if you walk. However, likewise, the lender should not have been doing ANY reporting since the bankruptcy filing, even the current payments. So, if you walk, the lender may report, but it should be removed upon bringing it to the lender's attention. However, as soon as you do, the lender should also remove any good reporting since the bankruptcy.

As you can see, this may effect your credit score from a number of angles. For more information about mortgages and bankruptcy, check our website at www.LaBellaLaw.com.