When facing multiple foreclosures, when will ch 7 filing keep them off credit report?

[DecentHuman]

Maybe someone can help me with this. If I have multiple properties facing foreclosure, when should I file ch 7 bankruptcy to avoid foreclosure judgments on my credit?

I know ch 7 will wipe out my personal liability for the notes and I will not be subject to deficiency judgments. However, some lenders have already filed foreclosure and some will file before and after I file bankruptcy. Will the foreclosure judgments before bankruptcy show up on my credit, but not those after?

When considering the timing of my bankruptcy, do I need to file before any foreclosure judgments to protect my credit from foreclosures in addition to the bankruptcy?

(I am delaying ch 7 now while trying to save a few properties with negative equity that the trustee would not be interested in while avoiding preference issues.)

To all of you who stay in these forums after you complete bankruptcy, thank you for being here.

[HakunaMatata]

Secured payments (in your case, mortgages) aren't deemed preferential. Provided your definition of "save" doesn't involve transfer, you may be able to proceed with filing.

From my understanding, foreclosures in which deeds have been transferred will be reflected as such on your credit report. If you file during the foreclosure process (and, ultimately, receive a BK discharge), your credit report will reflect IIB.

[DecentHuman]

Hi Hakuna Matata, What's IIB?
What do you mean by foreclosures in which deeds have been transferred? Eventually the deed gets transferred back to the bank.
Thanks.

[StartingOver08]

The tradeline (mortgage) will read: included in bankruptcy (iib) if you file BK and before the foreclosure action is completed. The only history that will be reported is the history up to the filing date.

After you file and are discharged, the foreclosure continues and is part of the public record but is not notated on the credit report because the disposition of the debt (iib) has already occurred in your bankruptcy.

[akame5150]

I agree with startingover. I had numerous rental proprties that I included in my chapter 7. I filed BK before they went to foreclosure.

The only thing my credit shows in regards to each rental is IIB. No foreclosure.

[DecentHuman]

Follow up on foreclosure after bankruptcy on credit report

The tradeline (mortgage) will read: included in bankruptcy (iib) if you file BK and before the foreclosure action is completed. The only history that will be reported is the history up to the filing date.

After you file and are discharged, the foreclosure continues and is part of the public record but is not notated on the credit report because the disposition of the debt (iib) has already occurred in your bankruptcy.

So if the foreclosure is part of the public record, it doesn't show up on the trade lines - but isn't there a public records or judgments section on the credit report? And if it's in that section, does it still negatively affect my credit score?

Also, what if the foreclosure is finalized before I file bankruptcy? Then I have both the foreclosure and bk on the report, so would it be better to file bk before allowing anything to foreclose?

Oh, and about history being reported up to the filing date, does it matter how bad it is?? I mean, some of my mortgages are five payments behind now, and the truth is, I can't file yet.

[DecentHuman]

I agree with startingover. I had numerous rental proprties that I included in my chapter 7. I filed BK before they went to foreclosure.

The only thing my credit shows in regards to each rental is IIB. No foreclosure.

Wow akame5150, so the public records didn't show up on your credit report?

[StartingOver08]

The public record foreclosure will not show on your credit report IF you file BK before the foreclosure is finalized. You still have to disclose it when applying for a new mortgage, but it doesn't show on the credit report as a foreclosure.

The BK WILL show in the public records section of your credit report for 10 yrs with a Ch 7 BK and 7 yrs for a Ch 13.

You probably will have to dispute items on your credit report after discharge since there are a lot of reporting errors among the CRA's.

As to the history, it effects getting new credit but only in the beginning. As you begin to rebuild, the history ages and has less impact. The scoring formula weighs the last two years the heaviest.

[DecentHuman]

Wow, there seems to be a combination of
a) lack of information
b) confusion
c) disagreement
on the Internet over whether foreclosure after bankruptcy shows up on credit reports. These days I figured it would be a pretty frequent question with a ready answer! Anyway, startingover08, maybe you're lucky it didn't show up in the public records section of your report.

Here's a link I found about ensuring the foreclosure judgment is "in rem" (against the land,) not "in personam," against the person, since we discharged it in bankruptcy. This is a way to try to keep it off the credit report. http://www.avvo.com/legal-answers/po...ft-107884.html

I asked this question on avvo.com too, and got three responses so far. The third one also refers to this in rem vs in personam distinction: http://www.avvo.com/legal-answers/if...ify-_-question

[StartingOver08]

In my post I said it would not show in the public records section if you file BK BEFORE the foreclosure. The reason you cite is the very reason it can't show in your public records section: it is an "in rem" action only. (JustBroke has a number of posts discussing "in rem" actions.)

I agree that there is a lot of confusion, dissagreement and lack of information. Also, you have to stay on top of your reports because the CRA's will report anything that a data furnisher provides to them...its up to you (and me) to monitor our own reports to make sure they read right. What has helped me is this site: http://www.myfaircredit.com/forum where you can see actual cases related to reporting after bankruptcy. I have been on top of my reports since my discharge and have found several errors, even errors as small as the CRA's reporting a 'blank field' in the balance area rather than a zero. This impacts your score greatly. I have not had the issue of my 3 foreclosures reporting (2 properties, 3 loans), but if it does...I will take the appropriate steps to correct it.

[DecentHuman]

Ah, this is good information. I would never have known that a blank in the balance area instead of a zero messes up your score. This is waking me up to the job ahead of monitoring my credit. It doesn't automatically get reported accurately; it's a full-time job. Well, maybe not full-time ;-) Anyway, I was talking about the same thing as you; bankruptcy before foreclosure or foreclosure after bankruptcy. Which means I'd better try not to let these foreclosures finish before filing bankruptcy. Hmm. Thanks for the link. I found the section where they talk about reporting after bankruptcy: http://www.myfaircredit.com/forum/vi...c68efa975c9e6f