Moral Obligations Of Walking Away

Walking away is certainly a hot topic. I brought up the issue of walking away on October 2nd 2007 in Mortgage Forgiveness Act - The Seen and Unseen.

The winner in the debt forgiveness provision (if there is a winner) is the struggling homeowner. The unseen loser is the mortgage holder, the NAR and the NAHB. Prior to this legislation a homeowner had to worry about tax liabilities of just handing over the keys and walking away. If debt was forgiven prior to bankruptcy, there was also a tax liability. Such considerations have been removed. At the margin, more people will be tempted than before to hand over the keys and walk away.

Read the rest