When it comes to considering bankruptcy or foreclosure sometimes one is better than the other depending on your circumstances. Giving up to both isn’t always the best options, so deciding between the two sometimes needs to be done. This article is going to deal with the most commonly asked questions when it comes to choosing between bankruptcy and foreclosure.
Is there any time a foreclosure or bankruptcy would be as good as a deed in lieu of foreclosure or short sale?
If the bank does not offer or approve a request for a short sale or deed in lieu of foreclosure. Then you would have to decided between a foreclosure or bankruptcy.
Doesn’t filing for Chapter 13 stop a foreclosure?
Yes almost always, it will. If your have multiple bankruptcy filing they will stop subsequent bankruptcy filings before they get started, in this case filing to stop foreclosure would not work.
What is better choice between bankruptcy and foreclosure?
It depends on if you want to walk away from your home, or if you want to keep the property.
What is a foreclosure deficiency and do I have to pay it?
An example of a foreclosure deficiency is if you owe a $100,000 on your mortgage. At the foreclosure auction the home sells for $50,000. You owe the bank a “deficiency” in most states for the remaining $50,000.
Does a bankruptcy discharge the deficiency debt?
The deficiency debt gets treated as unsecured debt by the bankruptcy court, deciding on its discharge depends on the type of bankruptcy you filed and decision of the judge. A chapter 7 bankruptcy would likely discharge the debt, while a chapter 13 would make you pay a fraction of the debt over a term of years. Speak to a bankruptcy attorney in your local state to find out the specific answer in your personal situation, since it can vary.
What is worse for my credit a bankruptcy or foreclosure?
They are both bad for your credit and will stay on it for 7 to 10 years. If you want to buy a home in the near future a foreclosure on your credit would look worse to a lender than a bankruptcy likely. With bankruptcy on your credit you can get approved for a FHA loan in 3 years, usually.
Hopefully this answered some of your questions regarding bankruptcy and foreclosure. There are many options to consider when you are facing economic hardship. The best choice is too talk to an experienced foreclosure and bankruptcy lawyer in your state. Also doing as much research on the two subjects as possible. This will give you the knowledge to consider both options and see how they work separately and together. Do your research, make a list of all your questions, then ask a local lawyer them, that way you can make and educated decision.
Latest posts by ljspahr (see all)
- Steps Involved In Getting A New Mortgage - December 29, 2009
- Today I Was Forced To Serve A Five Day Eviction Notice - November 5, 2009
- The Paper Trail You Need to Follow to Defend Foreclosure - September 24, 2009