Expert: Terry Leeders - 12/14/2008

Question
I filed bankruptcy a little over two year ago.  I had a two homes because I could not sell one.  I reaffirmed one home and surrendered the other in the bankruptcy and was told by our lawyers this would not be considered a forclosure.  would this be a forclosure on the surrendered home.

Answer
Actually, that is incorrect. The bankruptcy just discharges the debt for the mortgage, the foreclosure process is the transfer of the property title back to the lender.  Unless you did a deed in lieu of foreclosure, the lender would foreclose to get the property back.  They cannot collect on any balance though, because the bankruptcy discharged the debt for you.