Hi, I really need help fast! Here's the situation. I own a home and filed chapter7 and included the home in that without reaffirming it in 2002. Chapter 7 is not an option now. I have continuously lived in the home since then and made all payments. In Dec. 2006 took out a second mortgage on the home from the same mortgage company. So currently I have 2 mortgages on the home. I live in Illinois and for personal reasons I need to move to CA. ASAP. I need cash now. The mortgage company is set for closing on a new single mortgage which would leave me with about $7000 walk away cash. I could then use that money to make a life in CA. In this market I worry that I may not be able to sell this home. My questions are, what are the legal ramifications, what can I do to keep the mortgage company from coming after me for the difference (it will probably be in the $60,000 remained owing after sale range) and what are the tax ramifications? Thanks I really appreciate your help. My children and a finalized divorce are involved and I need to get to my children.

Hello j:

You ARE contemplating borrowing money with no intention of paying it back. That's fraud. If you follow through with your plan, and the bank discovers what you did (like finding this post), they can prosecute you criminally.

Secondly, there is NOTHING you can do to stop them from suing you for the difference.

The tax ramifications?? You'll probably be able to deduct a big capital loss against your income. You might be able to carry the loss forward for three years if you don't have enough income.

excon

Thanks, it's not that I don't intend to pay them back... I would rather list the home and try to sell it and I worry it may not sell which may put me into a position of not being able to pay it back.