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Walking Away

It sounds so passive, to calmly turn and put that underwater house behind you. Put one foot in front of the other until it’s well in your past.

I urge you to warn your friends, family members, and co-workers that this is not a passive act, but rather very critical decision that must be made with the utmost care. There are known and some unknown consequences of defaulting on a mortgage, and I strongly urge a consultation with a lawyer AND a tax professional. Only those professionals can help you plan for the consequences. These professionals can tell you what to expect, whether the lender can sue you, if you will lose your retirement account, face an IRS penalty, and many other possible ramifications that you may not have considered.

For many, there is no choice; it’s a matter of eating or making the mortgage. For others, it’s a voluntary choice based on simple economics. In either case, don’t call it “walking away” and mislead others to believe that it’s an easy road. Remember that getting a mortgage in the future will be harder, other creditors may decide to cut or close unrelated accounts, and even renting a house will be harder with a foreclosure.

Written by Keith Byrd - Go to Keith's Website/Profile