Legal Question in Bankruptcy in Texas

Is bankruptcy right for us?

Husband and I live (rent) in TX, but own a house in MD. MD house is a vacant rental that we can't sell. The house is worth $20K less than we paid for it in 1993 and we have been told by realtors that we would need $25K just to walk away from it at a closing. Not an option b/c we don't have enough collateral. Our cars are 8+ years old and paid for.

Finances: Retirement - IRA, TSP, 401 K, $7000 on credit cards, Child's savings acct., no other savings.

We are not yet behind in payments for any of our debts and have never had a bill collector call but we see no end in sight with future problems with this house. We would like to just walk away from the house.

Is bankruptcy right for us? If not, what are our options?


Asked on 10/25/99, 2:30 pm

2 Answers from Attorneys
Weston Cotten Weston Cotten Attorney at Law

Re: Is bankruptcy right for us?

Sounds like you might be a candidate. You will have to run the numbers to make sure, but it soundslike it from here.

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Answered on 10/26/99, 5:31 pm
Dorothy Bunce

Re: Is bankruptcy right for us?

Before considering bankruptcy, I would contact the mortgage company to see if they will take a "Deed in Lieu of Foreclosure." If not, do they have the right to or is it their policy not to seek "deficiency judgments?" In that case, you can simply deed the property over to the mortgage company and walk away without repercussions.

Even if the law does allow deficiency judgments on real property and it is the mortgage company's policy to go after borrowers, are they realistically going to do this? The fact that you live out of state and have limited assets seems to me to make it unlikely.

Life is a gamble, especially when you live in Las Vegas.

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Answered on 10/26/99, 6:38 pm


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