Despite the fact that property values have steadily increased since the Great Recession, many American home owners have not completely recovered. Many are currently sitting with property worth less than they owe on their mortgage(s). According to a December 2013 report released by CoreLogic, 6.4 million homeowners currently have underwater mortgages and, for some, it may be smart to just walk away.

A mortgage is considered “underwater” when the value of the house or property is less than the amount owed to the bank. This was a common issue facing millions of homeowners as the stock market and real estate prices fell in recent years. Even as we’ve recovered, many homeowners may feel they’re no longer getting their money’s worth from their property.

So if you’re one of the millions of homeowners who’ve seen their property value drop while expenses have either increased or remained the same, you have a decision to make. Stick it out and wait for property values to eventually rise, or cut your losses and walk away.

Here are some things to consider:

• Can you afford your mortgage? Whether you are having trouble making your mortgage payments or not, it can feel like you’re just throwing money away when your mortgage is upside down. For those who are not having trouble making payments, you may be able to pursue a strategic default, where you plan to walk away from the obligation (as opposed to an economic default), because you no longer feel it’s worth your money.
• Deficiency judgment liability: Depending on what state you live in, you may be liable for the difference between the amount owed on the property and the amount it garners at an auction or sale. Speak to a bankruptcy attorney to determine your level of liability.
• You still need a place to live: No matter what, we all need a place to sleep. Think about how much you pay per month and the type of apartment you could afford for that amount of money. Also, consider your neighborhood and how your house suits your needs. You may find it worth it to stay put.

If you’re considering walking away from your home, you should seek legal counsel immediately. There are many nuances to consider when dealing with home loans, foreclosures and defaults, don’t try and do it yourself.

Joel R. Spivack, Esq., has been counseling New Jersey and Pennsylvania residents on financial and bankruptcy issues for more than two decades. If you’re having difficulty with your mortgage and are considering filing for bankruptcy, contact the Law Office of Joel R. Spivack today for a free consultation.