foreclosure vs bankruptcy

[nadine874]

I was wondering if your home went to foreclosure sale and then you filed a chapter 7, what exactly is written on your credit report? Will it mention that a foreclosure was started but not completed, or will it only mention the bankruptcy and late mortgage payments? I ask this question because my rentalhome is going to sale next week ( and I don't want to keep it) and I was considering a rush to file ch7 before then vs just letting it go to sale and file ch7 afterwards. The difference is that to rush a ch7 in one week would put a significant financial strain on me and my family. We would do it if there were any benefit with regards to how it reported on our credit and affect us in the future. If the future effects will be same whether or not the sale is complete, then we'll wait and file at the end of the month when it is more feasible for us. Two people told me it doesn't matter, what do you guys think?

[midleman]

Why the rush if you are giving up the property?

I can tell you that the only thing a Chapter 7 will do is delay the foreclosure process. Unless you can get your attorney to attempt a reaffirmation with the lender they will get a release from the automatic stay and continue the foreclosure. Most attorneys do not even attempt reaffirmation on mortgages although the BK codes say they can. As far as your credit is concerned, both will appear and are both major dings on your credit. You may be able to get the credit bureau to show the case as dismissed after the BK but the filing is a public record and will probably remain on your credit for a while.

May I ask if you are having other debt issues that would require bankruptcy or are you concerned about a deficiency balance?

[BK newbie]

Read "negotiate with the lenders" post.
Its a way out pre-foreclosure and less damaging to your credit.

[SinkingFast]

We are filing Ch 7. Everything is gone except the house and it's in Foreclosure.

We thought if we did the BK, discharged the debt of the house, and then the Lender took it, that we'd only have the ding of BK on our Credit.

Our attny said, "Nope. Both BK and Foreclosure or DIL, whichever we do or whichever happens, will both show on our Credit."

Filing BK and loosing a house in the BK is a double whammy on your credit.

And according to what Mr. Veteran Lender that posted above me said in another thread, Foreclosure's a hit we won't recover from. No Prime Lender will ever touch us again.

[midleman]

Dont give up hope

I did not say never, just that it will take some time to re-establish your credit. The best way to overcome this is to not get back into debt and pay your bill son time. Time is the best healer of credit as long as you can maintain a good payment history with your remaining creditors. Once you have completed your bankruptcy (about 90 days) pull all 3 credit reports and see what is being reported. You can go to www.annualcreditreport.com. This is the official web site for all 3 major CBR's. It is free once a year. If you wish to voluntarily pay some of your bills you may write the creditor and ask them to remove the item from your credit if you pay them a "settlement". Many will remove the item rather than report it as paid as agreed as long as they can get some money out of it.

One thing, if you have at least 30-45 days before the sale you may be able to keep the property, even after your BK as long as it hasnt gone to sheriff sale. Most lenders will consider a payment plan or modification even after a BK as long as you can balance your budget and show you can afford the payment. They dont want your property. This will dismiss the foreclosure and possibly solve your problem if you have time.

[SinkingFast]

You don't seem to understand,...........

When I said everything's gone, I meant everything. Anything we had of value, we've sold to stay afloat as long as we did.

We owed $8100 taxes to the IRS and we sold my truck to pay that.

We owed way more on the house than it would sell for. We cashed out our retirement IRA to pay off the 2nd on the house getting it ready to go on the market.

The House goes up for sale on the Court House steps, Tues, May 30th at 9am.

Nothing short of a miracle is gonna stop it now.

We have no money to make deals with any creditors. We just barely make it month to month living on cash as it is right now.

[midleman]

I understand

I definately understand your dilemma. Things have a way of working out sometimes differently than we hope for. I have seen my own struggles and God has turned my life around. That is why I do what I do. I know the anguish of financial distress and I want to spare others that pain. The only advice I can give you is dont give up and trust that God has everything under control. I know it is difficult to think in those terms when your life seems to be falling in around you but I have seem many miracles in my life. I wish you well.

[OOPSIDIDITAGAIN]

Check this out

i have three properties that are in or going into foreclosure status. i was thinking of filing chapter 7 to wipe it all off my credit. but then i thought, why pay $2600 dollars to file bk with an attorney. why not just let them all foreclose. will i still be harrased all the time to pay the balances if i dont claim bk. i just dont understand the benifits of filing bk if there is any to start with. i got a letter from an attorney that they have set up a property sell date of july 25. i do not wish to retain any of my properties. i cant afford too. so, should i file chapter 7 or should i just change my phone number and move to another city?