Can you really stop paying your mortgage?

Can you really stop paying your mortgage?

If you’re wondering whether you can stop paying your mortgage and just walk away from the debt post-foreclosure in Georgia, the answer is NO, NO, NO.

Georgia is not a non-recourse state. This means your lender has “recourse” options against you including attaching other assets you have in the state, and/or garnishing your wages.

If you’re walking away from your house, the only way to ensure that you won’t be pursued for the difference between the mortgage note and the amount the lender gets at the foreclosure sale is by filing bankruptcy.

I write this because of recent articles such as this one published in the Wall Street Journal December 10, 2009.

The mortgage mess is the result of a confluence of factors. Banks lent money stupidly. Folks borrowed money haphazardly. The whole thing exploded leaving people strapped for income–and their houses worth thousands of dollars less than their mortgage notes.

Some homeowners have figured out that lenders can sometimes take months to foreclose on properties (especially in areas where there is a lot of distressed property). These homeowners elect to stop paying their mortgage and wait out the sheriff. And in states like California where lenders are prohibited from pursuing the former owner for the deficiency, I suppose it’s a plan. The article discusses how the owners reallocate their mortgage payments to other expenses. Some folks save their mortgage payments for their anticipated moving expenses. Others do questionable things like plan cruises, or buy Disney tickets (see the article–also check out the comments from other readers if you find yourself feeling outraged).

Don’t try this in Georgia. There is a small cadre of law firms who are devoted exclusively to recovering from homeowners who walk. They are very busy firms these days. Believe me when I tell you that they will eventually get to you–helped by our state’s extremely long statute of limitations that governs how long they have to initiate a suit. Unless you’re judgment proof–meaning you have no assets and no income that a judgment can touch–you’ll be unpleasantly surprised to hear from these firms if you decide to walk.

My advice: talk to a bankruptcy attorney about your options before you make any big decisions about your house and your mortgage. You should be informed of our state’s laws and prepared to protect your assets and your family from bad outcomes.

Yes, it is possible–and sometimes advisable–to ‘wait for the sheriff,’ but please don’t decide to do this without seeking legal advice from an experienced bankruptcy attorney.

Call me, Attorney Shannon D. McDuffie to arrange your consultation. (404) 418-8879.

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