I have a friend that is losing her home and decided to give back a vehicle. I asked if she was filing BK and she said no, there would be a foreclosure AND a BK on her credit as opposed to just a foreclosure. I told her she needs to file BK as she can be sued for the rest of the loan on the vehicle but I wasn't sure about the home loan. I want to give her some advice as she and new husband are young and this is their first debt. She also stated they don't have enough credit card debt to file BK. Isn't the repo and home enough? I should know these answers but we don't have a home to worry about when we file BK in a few months......
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If she files bk, she can turn the house in as part of the bk filing. That avoids the foreclosure PLUS the bk. Is their income low enough to file Ch 7?Originally posted by sassiebaz View Post
It depends on their complete financial picture. They are young, so playing the Ch 7 bk card is tough given they can't use it again for 8 years when they could have to deal with a job loss, medical disaster, etc and won't have bk to use for help for quite a while.She also stated they don't have enough credit card debt to file BK. Isn't the repo and home enough?
Their best bet is for the two of them to stop guessing about what to do and set up 2-3 free initial consultations with experienced bk lawyers in their area. There's no obligation and they can find out a great deal about where they really stand financially. Then they can make a sound decision about the best long-term solution to deal with their secured and unsecured debts.I am not a lawyer and this is not legal advice nor a statement of the law - only a lawyer can provide those.
06/01/06 - Filed Ch 13
06/28/06 - 341 Meeting
07/18/06 - Confirmation Hearing - not confirmed, 3 objections
10/05/06 - Hearing to resolve 2 trustee objections
01/24/07 - Judge dismisses mortgage company objection
09/27/07 - Confirmed at last!
06/10/11 - Trustee confirms all payments made
08/10/11 - DISCHARGED !
10/02/11 - CASE CLOSED
Countdown: 60 months paid, 0 months to go -
I agree with everything you are saying. These are the kind of people that won't hee my advice, they know everything...ya know the type? Yes, they are well under the median income as she is a student and he has been cut back alot at work. They do have cc debt. I'm not sure why they don't understand the BK process.....I've been through it. Sometimes you just cannot get through to people.....Comment
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Foreclosure & BK:
A FC will keep you from buying another home for 3 years, a BK for 2 years. So, yes, have the house go into foreclosure* then file the BK to keep anyone from coming after you for the remaining amount owed.
* For those giving their homes up in FC. Keep track of the house and when it is sold to a buyer, get a record of the date that happened, and keep it with you always. Sometimes a credit report indicating a foreclosure date is good enough, but sometimes a lender will want to know when the home sold.
Forecloseure and BK are not the end of the world, time goes by and you can buy again
CharlesComment
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Our friends seem to think that a "foreclosure" and "BK" will be just that....that nothing will be left for them to do. I'd like to gently let them know they may be held responsible for the debt still. Maybe even sued for it. Any suggestions?Originally posted by LoanDoctor View PostComment
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You can tell them that the amount owed can end up as a collection, which will kill their credit for years. Once their home is sold to a new owner, they need to find out how much the lender is still owed. That is the amount that that lender - or their assigns - can come after them for.
CharlesComment
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