My girlfriend left me with the 1st and 2nd mortgage. Her credit score was really bad when we got together so only my name was on both loans. Without her income I am unable to make the payments leaving me with only one option file for bankruptcy. I did some research and have discovered that I can file bk chapter 7 or 13 and from what I’ve read I should file for chapter 7 since I do not want to keep the house or should I say can not afford to keep the house.

Current Financial Standing:

Currently I have 2k in my checking.
First Mortgage bal = 133k (house appraised @ 140k)
Second Mortgage bal = 25k
1 credit card = 1,500
My Questions:
If I file for Chapter 7 am I still accountable for the first and second mortgage loan? Should I file for Chapter 7 first then let the house go into foreclosure or should I wait until the house goes into foreclosure first then file Chapter 7?

Thank you in advance for your help in this matter.

If you file bankruptcy, the house does not foreclose, the court sells the house instead of the foreclosure. If you are not going to keep it.

There are options of trying to sell the property on a short sale, where the lenders take less than loan value for payment in full.

Fr_Chuck,

Thank you for clarification on the foreclosure. I will contact my mortgage lender and see if a short sale is an option.

Should I be honest with them and inform them that if a short sale is not possible my only alternative would be bankruptcy?

For a short sale, they will have a group of forms, you have to provide them with copies of income, debts and more to prove you can't afford ot keep it.

Thank you so much for your help. Have a great day!

Should I be honest with them and inform them that if a short sale is not possible my only alternative would be bankruptcy?

Yes. Avoid bk if you can, but file if you must. Have you had the property for sale? Any buyers? Was it listed with a realtor?