Here is the scenario: We are a married couple, two kids. Both work full time. Combined annual income is ~$154,000/yr. Credit is crap…creditkarma says we have a 600 credit score. We are currently 3 years into a 5 year BK13. We have about $350,000-400,000 in equity in our home currently (owe ~$530k, it is worth about $900k on the current market).

In spite of the BK, we fell behind again on payments, and we’re pretty deep… about six+ months behind. If we sold the house now, we would have several hundred thousand for a down pmt, and be able to buy out of the rest of the BK and start fresh.

My question is this: even with a $300k down pmt (which I am assuming we would use as a 40-45% down pmt), is anyone going to give us a mortgage loan with the shitty credit and the history of past due mortgage pmts? If not, what is our best move with a 600 credit score ?

Answer

Looks like you can exclude up to $500k if filing jointly and meet some other requirements

Check with a tax person, but looks like you can sell without a tax consequence.

So you can sell your house put the money into a CD, move to a crappy apartment and save money until your credit is fixed and you learn how to live within your means.