Deficiency Judgments

Hi Paul:

I went through a bad divorce that ended with a foreclosure and a deficiency judgement of $90000+.

Would like to purchase another home in a couple of years and I am eligible for a va loan, but the judgement has to be paid or being paid on. The judgement is joint with ex and i can not afford to pay 1/2 of it nor all of it. 

Should I go ahead and file bankruptcy and try to repair my credit immediately. 

The wait for a va loan after foreclosure is 3 years and 2 years after bankruptcy discharge.

Rachel

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Hi Rachel,

I’m not an attorney and can’t advise you on filing bankruptcy.  I am thankful for your post because millions of borrowers are facing foreclosure at this time and many are unaware that a deficiency judgment may be possible (depending on state law and other circumstances). 

I would advise you to talk to a bankruptcy attorney about your options.  For others who find themselves facing foreclosure – please be proactive and look at the option of selling as a short sale and obtaining a full release of liability upon closing.

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.