Foreclosure after bankruptcy

Posted by Melanie Jones on June 23, 2008 at 13:40:16:

My husband and I went through bankruptcy in 2004 as a result of our business going upside down when a large client reneged on a contract. We had used our residence as collateral on a SBA loan--we filed BK and purchased a different home for a re-do of the business with the hope of selling the other home. Even though the debt was discharged we found out after the fact (bad lawyer) that the lien stays with the house--thus all we can hope to do is sell the house for the mortgage due with any equity going back to the SBA. We have been trying to sell the house since "06 and recently put another $15k in updates--if we can't sell by the end of the Summer we are considering going into foreclosure as our credit is not good regardless because of the BK in '04 and it is a money drain $3000+, we can't re-fi because no one lives there (we're not going to rent it--tried that and it was trashed)--what are the downsides of doing this and conversely is there an upside to doing it?

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