Posts Tagged ‘Chapter 7 Bankruptcy’

Stop Foreclosure With These 3 Proven Strategies

Friday, May 1st, 2009

Introduction
When all else fails, a homeowner facing foreclosure isn’t without a few resources up his sleeve. While these last minute efforts shouldn’t be used until there aren’t any other choices remaining, many homeowners have found them invaluable for stopping foreclosure and saving their homes. Some are more commonly known than others, and this list is not all inclusive. Your situation may differ from those that find these methods successful options. Still, they are options and can be used to save your home.

Deed-In-Lieu of Foreclosure
It is possible to get a deed-in-lieu of foreclosure, but your lender will probably want to see that every effort has been made prior to agreeing to this option. The lender doesn’t want to be a real estate owner and doing this will make him one. However, he will be willing to accept this when all other options are exhausted because there are a few benefits for the lender. The loss on the loan for the lender will be less with a deed-in-lieu. It doesn’t cost the lender as much as the pursued foreclosure and it takes less time to see a recuperation of funds for the lender than a foreclosure does.

Chapter 7 Bankruptcy
Chapter seven bankruptcies may be an option for the desperate homeowner. However, be careful with this option and fully understand your state’s individual laws concerning chapter seven bankruptcies as you may or may not be able to keep your home by choosing chapter seven bankruptcy. It all depends upon the limitations of each individual state has in place for this type of bankruptcy. If your equity is more than the allotted amount, more than likely you will be forced to sell the home under the provisions of chapter seven bankruptcies.

Chapter 13 Bankruptcy
If the goal is to keep your home and there are no options left, chapter 13 bankruptcy may be for you. This type of bankruptcy allows you to pay off the back amount owed over time, which can be up to five years. Just be aware that you must also make your current mortgage payments at the same time. If all payments are made and the conditions of the proposal for repayment under chapter 13 are fully met, you will be able to stop foreclosure and hold onto your home.

If your house has dropped in value due to depreciation, it is possible that a chapter 13 bankruptcy can eliminate a second and third mortgage. This can happen when your first mortgage has all value of your home tied into it and there isn’t an adequate amount of equity left to secure the second and third mortgages. If this is the case, then your second and third mortgages will be reclassified as unsecured debt. Unsecured debt is the lowest priority in a chapter 13 bankruptcy and often doesn’t have to be paid back at all.

Tags: , , , , , , ,
Posted in Foreclosure Help | No Comments »

Bankruptcy Vs Foreclosure: Which Is Better?

Monday, April 20th, 2009

Decision making is something you just can’t avoid no matter what kind of situation you are in. Tough decisions are even harder to make. Sometimes, as a homeowner, you might be in a dilemma as to what to choose among bankruptcy and foreclosure of property. Perhaps the information given below might help point out the right direction for you and help you make a better decision, with regards to your circumstances.

No matter which option you choose, here are a few things that might remain the same – you will still lose your home; you will damage your credit rating severely while your credit score would plummet by about 200-300 points. The effects of either of these options are long lasting and have severe implications on your future credit availability, reputation and other financial matters worthy of consideration.

Choosing between bankruptcy and foreclosure is like choosing how you would like to die – use an aspirin overdose or just get shot. You must realize that any bankruptcy event will linger on your credit report for more than 7 years. While Chapter 7 bankruptcy is strictly for unsecured loans, the way it links to your home loan is when you might be in a position to pay off your mortgage when you file bankruptcy with your unsecured loans like cards and bank overdraft. Chapter 13 bankruptcy is another option you might like to consider; the big brother of your Chapter 7 version.

When you file a chapter 13 bankruptcy, the courts will mandate you to pay your remaining debt in an easy, payable manner within a stipulated, pre-set time – the priority is usually to pay off your protected and secure loans and at least 25% of your unsecured ones within 5 years. The amount is usually set to be additional to the mortgage payment and when you can’t do the same, the lender will request for a stay request and proceed for a foreclosure process. An individual applying for a bankruptcy in his or her name and that wouldn’t affect the credit ratings of his/her spouse, unless the property is a joint-ownership.

You will also do well to remember that in the event of a short-sale approach to the foreclosure, there is a likelihood of have to pay up a mandatory deficiency balance if the lender so decides. It is best if you leave the entire fact gathering to competent professionals like agents and attorneys, but take the decision which best suits you.

Tags: , , , , , ,
Posted in Foreclosure, Foreclosure Help, workoutsolution | No Comments »