credit line – home foreclosed – money in annuities and ira. Can the bank take that?

April 19th, 2010 by Jarad

Question:  I owed $110,000 on a credit line; tried to sell my house, but couldn’t sell it for that amount. I walked away. I have some money in annuities and ira. Can the bank take that?

Answer:  – No they can’t take anything away from you because the property itself was pledged as collateral for the loan. All they get is the property back. What you have to watch out for is if they file a deficiency against you it the property was sold for less than the amount owed. If the file a deficiency judgment again you and you don’t have the ability to pay, the bank can then begin to garnish wages. At this point most people file bankruptcy. It is at this time where your annuities and IRA may be affected. If at all possible, try to negotiate a “deal” with the bank to get them to agree to a satisfaction which means they can’t file a judgment against you. They will just issue you a 1099.

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