questions & answers

Question: I own a property, not my main residence, that was part of a 2010 C7 bankruptcy. We reaffirmed and kept the property. We have made all of the payments since, but in the past year our finances have declined. We have tried to rent the property without much success and we have paid over $6000 above the properties income to maintain it. It is empty again and we simply cannot continue to pay the mortgage and HOA any more. It is worth about what I owe. Can I allow the property to go to foreclosure or short sale after being part of a bankruptcy?

Answer:

The foreclosure process is essentially a process for a bank to take the property back, having filed a bankruptcy previously will generally not prevent a home from going to foreclosure however bankruptcy may not be an option for any debts left over after the foreclosure.  Arizona does have anti-deficiency statutes that protect borrowers from having to repay certain loans secured by a mortgage on a residence, however there are certain debts that will generally not be covered by the law such as HOA fees.

Individuals faced with loss of a home through foreclosure/trustee sale or dealing with issues related to a foreclosure can apply for free and reduced fee legal services through the Access to Justice Online Intake System, the link is also available on the top right of AZLawHelp under the “LegalLEARN” section. Individuals may also contact legal aid directly, however due to high call volume there may be long wait times on the phone and the phone system may disconnect calls when overwhelmed. To find the legal aid agency serving a particular county in Arizona, select the desired county in the drop-down under the section titled “FIND FREE LEGAL HELP” on the right column of AZLawHelp.

To find a housing counselor:  http://www.azmortgageresource.gov/get-help-now/find-a-counselor