foreclosure spouse credit
foreclosure?
I am currently in a very high mortgage, one that I really cannot afford. I am behind on my payments, and quite honestly, ready to just walk away from the house. My name is the only name on the mortgage, however my spouses name is on the deed as along with mine. If we decide to foreclose, what happens? Will my spouses’s credit be affected and will they garnish wages or bank account? I do not want to walk away, but we are working 2 jobs each to keep these bills up, and we just cannot continue to do this as we have 3 children.
If you decide to walk away from the house, the lender will begin trying to collect their money. After a few months, they will hire local attorneys and sue you for the foreclosure. Once the foreclosure judgment is awarded to the lender, the house will be sold at sheriff sale. And after the house is sold, ownership will transfer to the high bidder and the eviction process will start, where the county sheriff will be ordered to change the locks and remove any remaining people or property.
Of course, if you’ve moved out, this entire process will go ahead without your involvement or knowledge. The most dangerous part is the eviction, but you won’t be evicted if you aren’t living there anymore.
The bank could possible go after your spouse’s credit because you are married and count as one “economic unit,” so to speak. Whether they do it or not depends on how much the bank knows about your spouse in order to report negative information to the credit bureaus. Do they have a social security number? A birth date? If not, it may be difficult to report the late payments and foreclosure.
The lender may be able to go after other assets and income after the foreclosure, if your state allows deficiency judgments. Not all states allow this, so look up your foreclosure laws. But banks almost never sue their former clients after foreclosure; they know that you couldn’t make the mortgage payments, so you probably can’t make payments on a judgment involving the mortgage. And it will cost them time and money to hire attorneys to sue you again, when they haven’t collected a single penny from the original foreclosure lawsuit. It’s just not worth their time.
Hope that answers your questions. Good luck.
ForeclosureFish
