02 Mar Strategic Foreclosure of a House and Voluntary Surrender of a Car in Minnesota
Taking a business like approach to the decision on whether to keep your house or car is the best course of action. When I say take a business like approach I am speaking to the idea that businesses are often faced with tough decisions, but the bottom line is the bottom line. The same should be true for individuals who are filing bankruptcy or considering bankruptcy. The power of bankruptcy in Minnesota will protect the filer from any deficiency. The creditor can no longer collect against the filer. The bankruptcy will also protect the filer from any tax liability which can result from a foreclosure or from debt settlement.
Who should consider strategic foreclosure on a MN house or a voluntary surrender of a car should boil down to simple logic. First, you need a place to live and a car to get around with. Second, you need to consider the your income and your ability to pay for those items. A house payment is generally the largest payment individuals make; car payments and the associated expenses is generally the second largest payment. Third, you need to review the value of house and car versus the amount of the loan. If the house and car is underwater a decision needs to be made. An example of a house that should be subject to strategic foreclosure would be a house that is $30,000 or more underwater. The reason for this is simple, traditionally houses appreciate at a rate of about 3 percent per year. To make up the $30,000 would take years. The same goes for cars.
If you would like to discuss your financial situation please call me at 952.294.0144.