Legal Question in Credit and Debt Law in North Carolina

It depends. Are you doing a deed in lieu of foreclosure? If you have some equity in the home and there is only 1 mortgage then doing this will save the lender from foreclosure costs. In such case, you will lose the equity but I would get them to agree that they accept this in full satisfaction of the debt and can't hold you responsible for any loss (like if $150,000 was owed and the bank was only able to sell the property to a new buyer for $125,000).

If the bank will not do a deed-in-lieu, then you will have to go through foreclosure. In most cases, a bank may be able to seek a deficiency judgment but they have only 1 year to do so after the foreclosure sale. Whether they will or not depends on your circumstances. From what you relate, you do not have too many assets, so they may not sue. SS, VA and pensions are generally exempt from any judgments.