Ways Out of a Foreclosure
Think the only way out of a foreclosure is to file for bankruptcy?
Every situation is different and bankruptcy may not be the right answer for you. If your home debt is the sole reason to consider bankruptcy, this is most likely not the best solution. A deed in lieu or a short sale may be the better option.
If considering bankruptcy, it should be noted that after the bankruptcy is discharged there may still be debt incurred for HOA or Condo fees, taxes, etc. Fees incurred prior to the filing of bankruptcy are released from your responsibility however, all fees incurred after the filing will still be due. Some homeowners believe that if the forfeited home is included in the bankruptcy they are no longer responsible for such fees but this is simply not true. Furthermore, the title to the home remains in your name and you are still responsible until the title is transferred to a new owner. Additionally, as the owner of the property, you still have responsibility/liability for any incident or accident that occurs on the property during your ownership and as such it is important to maintain your property insurance.
If you decide a short sale or deed in lieu is the best route, it is good to know that in many cases the lender will release any remaining debt after the deed is transferred out of your name. It is also important to be sure that your lawyer or Realtor negotiate for release of any outstanding liens or money due for taxes, HOA fees, etc. Having an experienced Realtor and lawyer can help eliminate any surprises after the sale.
You also may want to consider a Deed in Lieu of foreclosure - this option may also be a great one if you are released of the remaining debt after turning over the title to the lender. It usually only works best when there is only one mortgage holder and no delinquency for any HOA or Condo fees. You will still need to negotiate the remaining liens.
Consult with an experienced attorney to discuss these issues.