What to Do if You Owe More On Your House Than It’s Worth: Part Two

Learn more about what you should do if you owe more on your house than what it's worth in Colorado.In this post, we’ll cover part 2 of what to do if you owe more on your house than it’s worth. If you owe more on your house than it’s worth, there are a few financial options. If you bought a home in Littleton, Centennial or Aurora and expected the price to go up, but instead saw it plummet with the market, it can be difficult to keep financially afloat. Hanging on to a bad investment is stressful. It also doesn’t allow you to go after other, better opportunities. Last week in part one of this series, we discussed a few options that are available to put the bad investment in your past. These include trying for a loan modification, and selling your home in a short sale. This week we’ll discuss a couple of different options for moving on from a bad investment. What should you do if you owe more on your house than it’s worth?

Deed in Lieu of Foreclosure

If you decide that you can’t keep your house, you can always surrender your deed to the lender. If you decide to go this route, you will voluntarily give your property to the lender. This has a few benefits:

  • You avoid the foreclosure process, which is expensive and time consuming.
  • You avoid a short sale, which takes a lot of patience and effort.
  • Because a deed in lieu allows the lender to avoid the legal cost and hassle of a foreclosure, often a lender is willing to pay a little bit of cash if you leave your house quickly, and leave it in good condition. This is often called a “Cash for Keys” program.

As with other options we have discussed, it is important to have an experienced bankruptcy attorney or real estate professional oversee a deed in lieu of foreclosure to ensure that there are no mistakes made which will leave you liable for the deficiency.

[pullquote align=”center” textalign=”center” width=”90%”]Keep your eyes open for the last part of this series, where we’ll cover the options which filing for Chapter 7 or Chapter 13 bankruptcy can offer![/pullquote]

We hope we answered your question about what to do if you owe more on your house than it’s worth. Having an experienced bankruptcy lawyer by your side as an advocate with a lender is important for your financial future, and to avoid future lawsuit. Contact Centennial, Littleton and Aurora bankruptcy attorney Barry Arrington at 303-205-7870, or submit the “Get Help Now” form, and he will fight to give you the best, fresh start possible.

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