How To Eliminate Your Mortgage Burden Using Deed In Liu Or Chapter 7 Bankruptcy
If you visit Zillow.com, you can see all of the houses for sale in any specific area. A quick search of Birdsboro, Douglassville, Gilbertsville, and Boyertown show a large number of houses for sale in a concentrated area. This is true in other towns within Berks and Montgomery County as well. What does this mean for the homeowner? Quite simply, a lot of competition and an inability to sell the house at the price they want. If they are trying to sell a house and it doesn’t fit the price parameters of the potential buyers, they will look at a neighbor’s house also for sale. During the housing boom from 2000-2007, the buyers outweighed the sellers in large numbers and the prices many people paid were much higher than the supported values. Now they are selling, and need to command a much higher price in a market that is already flooded with sellers. Are their alternatives? Absolutely.
One alternative is to file a Chapter 7. By filing a Chapter 7 bankruptcy, you can list the house as being surrendered on the petition and stop making payments on the mortgage right away. In time, the mortgage company will foreclose and the new buyer will file ejectment proceedings to make you leave the house. In the meantime, you can have the benefit of living there and saving your money while planning your next move. This is not out of the ordinary in the aforementioned towns where the numbers of sellers far outweigh the buyers.
Another alternative is to attempt to present a deed in liu to the mortgage company. This is where you are signing the deed over to the mortgage company and they don’t have to proceed with a foreclosure. Mortgage companies don’t generally do this because it negates their ability to move the house to a sheriff’s sale and get rid of the other liens (such as tax liens, judgment liens, etc.) through that process. Executing a deed in liu does not get rid of those liens by voluntarily transferring the deed.