Because theMarket has dropped SO bad, we are "upside down in our house verses our mortgages by $150,000. We can no longer afford to live here. If we give it back to the bank, what can they collect from us? We have no assets. We are both disabled with small children. Only lots of medical and credit card debt. We file bankruptcy and that would be that would be that, correct? There is no Gulag for people in debt in the US. Are there risks beside a black mark on our credit?

Hello P:

I think you understand your prediciment pretty well. If there's nothing to collect, then there's nothing to collect. You might try a short sale. That way the bank takes the hit or at least shares it with you. I'd certainly try it.

excon

You may very well be "judgment proof". The worse that can happen is for the bank to attempt to collect on any judgment they get against you. At that time you can declare bankruptcy. Corporations do this all the time. Your credit is already shot when late payments start. Bankruptcy last 7 years and late payments 10 years. If you do decide to do this. Do it sooner rather than later and stop making any payments at all. Save the money for a new place to live. You might need to pay cash for everything for a few years, but your money goes further without interest payments.

It's hard to squeeze blood from a turnip.

You may very well be "judgment proof". The worse that can happen is for the bank to attempt to collect on any judgment they get against you. At that time you can declare bankruptcy. Corporations do this all the time. Your credit is already shot when late payments start. Bankruptcy last 7 years and late payments 10 years. If you do decide to do this. Do it sooner rather than later and stop making any payments at all. Save the money for a new place to live. You might need to pay cash for everything for a few years, but your money goes further without interest payments.

It's hard to squeeze blood from a turnip.


No problem if it's your choice to answer old posts but this is from Aug 2007 and the OP hasn't been back -

OP will probably not see your advice.