Legal Question in Real Estate Law in Alabama

I have owned my home for over six years. I purchased it in 2006 when the market was up. The house across the street that is comparable to my own is under contract for $58,000. I am very unhappy with my home and want to sell but I owe $117,000 on it. I have perfect credit and have a small amount of credit card debt and a car payment. I have no savings for a refinance. I am considering walking away, however, I live in Alabama, where I can be sued for the deficiency balance. What should I do?

Asked on 1/13/13, 5:54 pm

1 Answer from Attorneys

James Patterson Underwood & Reimer, P.C.

There are several options, but most involve your credit being damaged. You could look at filing for bankruptcy protection (chapter 7) depending on if you qualify and that would wipe out your credit card and deficiency balance on your home. You could contact the mortgage company and discuss a type of short sale. Selling it for less with the approval of the mortgage company. This would have the "least" damage to your credit, but i have seen very few of these successful. You could also just walk away and wait for the mortgage company to sue you for that deficiency balance, which could take several years. And then at that point file a bankruptcy. If you need any further advice, feel free to contact my office as we deal with this type of situation.

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Answered on 1/14/13, 6:52 am

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