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Bankruptcy Law Frequently Asked Questions (FAQs) | Missouri & Illinois Common Bankruptcy Legal Questions

Q: Can I Walk Away from my House during Foreclosure?

A: To say that you could simply walk away is inaccurate. If you are facing foreclosure, you can choose to give up your home by just walking away, but this does not mean you are walking away from the responsibility of the loan. If your home is sold at auction for less than the amount you owe, you are still responsible for the difference. It’s called a deficiency balance and more likely than not, the lender will attempt to collect this from you. This could translate into future wage garnishments, levied bank accounts, and loss of other property that is important to you.

So, “walking away” from your home isn’t exactly as easy as it sounds. You may still have a large responsibility following you around wherever you go. You may want to consider other options that address the bigger problem. A Chapter 13 bankruptcy may just help you do more than stop the foreclosure on your home. It can also help you get a handle on the rest of your debt.

If you have accepted that you can no longer afford the home, you can still get rid of the deficiency balance by filing a Chapter 7 bankruptcy.

If you want to learn more about a Chapter 13 or Chapter 7 bankruptcy, request a free copy of my Illinois and Missouri bankruptcy book, “Get Out of Debt: Secrets Your Creditors Don’t Want You to Know.”

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