The 12 Months Of Default (Christmas Song)

Not very funny but it is a clever way to teach the advantages of walking away from a house loan that has no equity and is underwater.

For many that are going to lose it all anyway sometimes the best option may be to make that decision sooner. I have done counseling for hundreds of bankruptcies and a very large percent who took this route (bankruptcy) to save their house just postponed the inevitable for a few more years. This made it worse for them in the long run.

True, the mental stress of walking away is hard, but the mental stress of years of trying not to walk away can be worse. Consult any bankruptcy attorney to explore your options.

Walking away from a house that is ruining you or is under water (you owe more than it's worth) can be a tough moral decision.

Some interesting things to think about?
What are the moral obligations:
  • Of a banker willing to lend money to someone who they knew could not afford the house?
  • Of a banker lending money to someone not caring how overpriced the home was?
  • Of a homeowner to provide for their family through the best legal means they can?
  • Of someone who could “afford” to make payments but at the expense of say health insurance or better providing for their family?
  • Of someone who signs a contract with a thief or con-artist?
  • If you've more then paid for the house already?
Does moral obligation only run in one direction?

What is the difference between a bank being legally rescued (government bailout) because they couldn't meet the obligations brought on by bad investments, and a home owner being legally rescued (bankruptcy) because they couldn't meet their obligations and made a bad investment in their home?
Not paying your bills is no crime by US law. Defrauding someone is. In most cases the home owner did not intend to defraud. I'm not so sure that can be said about our lending institutions.