thinking about bankruptcy, advice much appreciated!?

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Me and my wife recently separated and have not officially divorced yet. Her name is on the deed since we signed her on, but the loan is under my name alone. Now that I have the house myself I can barely make the mortgage, and can not afford to keep going like this. I have been trying to sell the house the last three months at a break even price in SLC, UT, and no luck and not even an offer. I don’t know if I would be able to afford it even if I got some room mates.

I have spoken with an attorney and they said that my best option would be chapter 7, but how would that compare to just giving the house back to the bank?

And finally, my X wife is afraid it will hurt her since we are still married and her name is on the deed. I didn’t think so since the loan is just under my name, but she was also concerned about it looking bad to the courts and me losing any kind of custody over our two year old. We are planning on doing an uncontested divorce. Any advice would be great!

  1. Reply
    alex l
    May 1, 2011 at 3:13 am

    well the only thing i can really say is that the market really sucks so if you need to sell your house i would do the best i can with the mortgage then sell when the market is up.

  2. Reply
    May 1, 2011 at 3:21 am

    can you rent the house out? Bankruptcy sucks and I was going to file bankruptcy, but the bank was going to foreclose on me anyways (it was a big mess). So be careful filing bankruptcy and see if there are other options out there. About your wifes concern, talk to your lawyer if it will effect her, and if it does effect her, who cares? You were married, it really is her problem too, her name is on the house.

  3. Reply
    Ted P
    May 1, 2011 at 3:46 am

    ok- so your wife moved out- how much of her income went to the mortgage? You do not think you can a roomate/s to come up with that amount each month- if that is the case , you cannot really afford the house anyway- . If it’s going to be an uncontested divorce, you and your wife can set up your own custody rules,- so it really won’t make you look bad in the courts. You both will have to show safe places of residences to prove the child will be in a suitable home.– bankruptcy will also discharge any money owed to the bank on any bills you may have, wipe out everything you can at one time, if you just let the bank have it, they may come after you for any deficiency amount-

  4. Reply
    May 1, 2011 at 4:15 am

    My $ .02.

    It sounds like the only reason you would have for filing bankruptcy is the house. If they repossess the house it will leave a black mark on your credit report for 7 years. If you file bankruptcy it will be there for 10 years.

    I would also bet that in a few years after the real estate market has corrected itself, there will be programs where individuals can purchase another house even if they have had one repossessed before because of the market. I would also bet that getting a credit card or car loan a couple of years after the foreclosure would not be as difficult as if you had filed bankruptcy.

    The lawyer is going to recommend bankruptcy, because then he will make money for doing the bankruptcy. If he recommended that you let the mortgage company repossess the house, where would he make money.

    If the mortgage is in only your name, then I would not think that it would show up on your wife’s credit. One way to make sure would be to get a copy of her credit report and see if it is currently reporting on her credit report.

    Also, if you two agree with the plans for custody of your child, there would be no reason for the court to override this agreement.

    Good Luck

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