Is it time to ditch a problem Wilmington house?
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For Wilmington consumers behind on their mortgage payments, foreclosure is the eventual consequence of delinquent balances. Your mortgage lender might let things slide for six months or even a year, but eventually, they will come calling. If you can’t afford to dig yourself out of a past-due situation, you may wonder if you should go ahead and move out once you know a foreclosure is coming. If you choose to file bankruptcy, that can stop the foreclosure for the moment, but if you can’t catch up, it’s still a looming concern. Should you leave the home or stick around until the bitter end?
Delinquent Mortgage, Foreclosure and Chapter 7 Bankruptcy
It’s stressful if you fall behind on your Wilmington mortgage. Once you get a foreclosure notice, you must decide whether you can afford to keep your home and, if so, what to do next. If you’re upside down on your mortgage, it might not be feasible to keep your home. The important part is realizing that hanging onto a house at all costs may not be what’s best for you. A home is a hard thing to give up, but if you can’t afford it, you must make smart choices about your future.
Once you decide you can’t keep the house, the question becomes how to give it up to get the best results. If you simply walk away from the home, it will eventually be foreclosed on, but that’s not all that happens. Until the mortgage lender takes possession of the home, which can take many months or even a year, you are legally responsible for the home. If there’s a homeowners’ association, fines and fees can accumulate. If the property becomes derelict, you might be assessed municipal court fees.
Abandoning a Home Is a Risk
If you walk away from your Wilmington home without the protection of bankruptcy, you might find that associated debt haunts you in the future. After the mortgage lender takes back the home and the transfer is registered with the county property records office, any fines or fees that occur from there on out are not your problems. However, everything up to that point is still your responsibility. Once the transaction is complete, filing bankruptcy wipes the slate clean of most debt associated with the house.
If you have a second mortgage or HELOC on your home, they will survive the foreclosure. That means the lenders can come after you for the outstanding balance on the debt. If you had any property tax or income tax liens on the home, those debts would also remain after the foreclosure. Plus, in North Carolina, your lender might be able to get a deficiency judgment. This means that the amount of the mortgage minus the amount the house sells for at the foreclosure auction becomes an unsecured debt.
Filing Bankruptcy Cleans Your Slate
Although it can be tempting to cut and run and just forget about your unaffordable Wilmington property, foreclosure isn’t quite that simple and not taking your time to think things through could come back to bite you in the end. What you need are information and options. If you’re behind on your mortgage, have little, no, or negative equity, and are ready to break free from a home you can’t afford, talk to a bankruptcy attorney about your options.
You might be able to negotiate a voluntary surrender of the home, and then file bankruptcy, thus avoiding foreclosure and the uncertainty surrounding it because of questionable timing. To find out more about your options for dealing with a delinquent mortgage, contact the Law Offices of John T. Orcutt. Call +1-919-646-2654 now for a free Wilmington bankruptcy consultation at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.