stalling foreclosure before BK

[Catia]

state: pennsylvania, deficiency state.

Ok, so far, if I gotta do all of this, I want to surrender my house in BK in order to avoid a deficiency judgement, and I'd rather do it all at once so I do not have to do it later.
For certain reasons, I may not be able to file BK as soon as I want to. I am trying to do some pre-BK planning, convert non-exempt to exempt, and liquidate what I can before BK cuz I might be able to get more $$ if I liquidate myself (as opposed to auction block prices)-plus, it is wiser for me to plan to keep what I am legally allowed so I have an easier fresh start.
So--I do not want forclosure to move too quickly. If partial pymts are made--does this stall it at all? Like does it add days/weeks?
Some stuff I am still confused about-with foreclosure and BK--I do not want the house, but I will be sued for deficiency for sure--so--how far into Foreclosure should I file BK for it to be included with my BK???
And can anyone clarify how BK and foreclosure is counted on credit reports--both if done together, and if done seperately?? I keep getting conflicting info on this. I know it's been covered, but it's still conflicting. Some say if you include home in BK, BK and FC are 1 event--some say no, it is 2 seperate events because if you surrender your home, FC still needs to happen and that is a seperate event. I have also read that with credit rebuilding, 2 yrs for straigh BK, 3 years for a BK with FC--I'm so confused my brain hurts.

[Flamingo]

state: pennsylvania, deficiency state.
Ok, so far, if I gotta do all of this, I want to surrender my house in BK in order to avoid a deficiency judgement, and I'd rather do it all at once so I do not have to do it later.
For certain reasons, I may not be able to file BK as soon as I want to. I am trying to do some pre-BK planning, convert non-exempt to exempt, and liquidate what I can before BK cuz I might be able to get more $$ if I liquidate myself (as opposed to auction block prices)-plus, it is wiser for me to plan to keep what I am legally allowed so I have an easier fresh start.
So--I do not want forclosure to move too quickly. If partial pymts are made--does this stall it at all? Like does it add days/weeks?
Some stuff I am still confused about-with foreclosure and BK--I do not want the house, but I will be sued for deficiency for sure--so--how far into Foreclosure should I file BK for it to be included with my BK???
And can anyone clarify how BK and foreclosure is counted on credit reports--both if done together, and if done seperately?? I keep getting conflicting info on this. I know it's been covered, but it's still conflicting. Some say if you include home in BK, BK and FC are 1 event--some say no, it is 2 seperate events because if you surrender your home, FC still needs to happen and that is a seperate event. I have also read that with credit rebuilding, 2 yrs for straigh BK, 3 years for a BK with FC--I'm so confused my brain hurts.

Once you are 30 days late with your mortgage payment (sending in partial payments does not work - you would have to contact your lender to work out an agreement as to any change with your mortgage payment), you line yourself up for foreclosure. You cannot, on your own, change your mortgage payment due to your signed paperwork when you took out your mortgage. You would be in Breach of Contract and they can come after you for payment and if you don't pay as promised, foreclose proceedings can be started. You can bet that after 2 or 3 missed payments you will be sent foreclosure paperwork unless you work something out with them. What occurs to your mortgage credit wise before filing BK will stay on your CRAs and what is included in your BK as of your filing date will be indicated as included in bankruptcy as of the filing date. So, therefore, your CRAs will show late payments prior to filing which probably will not be removed since it was prior to filing BK. Either foreclosure or BK or both on your credit report is the most devastating thing anyone can have on their reports so don't think cleaning up your credit after this will be easy or done in a short period of time. You need to do what is best for you and you may get all sorts of opinions on what to do and everyone has different experiences. Have you consulted with an attorney yet to get an indicate/handle as to what you should do and where you stand? It might allevaite some of your fears and help you tremendously as to any decisions.

[Catia]

Well, if I could afford a 1/2 wat decent attorney at this point, I would not be here researching. ;)
I need to get a lot of paperwork in proper order BEFORE I even begin that route, because due to illness (I have MS), I have yrs of taxes I need to file etc, I do not owe, but I need to have them filed, and get other stuff in order.
The property that would be subject to FC is now an investment prop, but used to be my residence. I am trying right now to protect my current primary residence, and some things need to be in proper order in order to be able to exempt my residence, and I need time to get that all done.
Thing is, there are so many foreclosures in my area, they are actually backlogged. Foreclosing on me quickly certainly is NOT in the best interest of the mortgage company, they'd get more $$ out of me not doing such, the house is WAY upside down due to drop in market value, but that doesn't mean they wouldn't FC quickly.
I have heard partial pymts can stall the process, buying time--anyone here do that? For instance, if I am 60 days late, and make 1 payment, would that keep me at a "rolling 30 days" late type of thing--meaning technically I'd be 1 month behind? Suggestions?

[FreshLikeADaisy]

Catia, you know that many bk attys offer free consults... no reason not to use them. They need not know you have no intention of hiring them. The truth is sufficient -- "I'm not planning to file for another couple of months" -- and see what they have to say.

Having been in both foreclosure and bk, I can tell you that partial payments are most likely not going to help at all: good money after bad, and might even signal them that your loan is in danger of default. But if you could make a *full* payment, that would likely restart the clock as you mentioned, but it really depends on your lender. Some of them are absolute hard asses about it, and don't offer any concessions until you're already in bk or foreclosure when it's obviously too late. Now, you can call and ask for a workout agreement -- place the delinquent pmts at the end of the loan, or a similar arrangement -- and go ahead and make the first pmt on that, which would put you current at least for that month. They may or may not allow that.

But, your lender has a certain point at which they will accelerate the loan -- foreclose -- anyway. The timing depends entirely on the lender. They can accelerate whenever they like; it's the foreclosure itself that is time-consuming. On the other hand, you may end up getting extra weeks out of the fact that your courthouse takes forever to file a piece of paper (I did, and found out about it by chance) so nothing is really as it appears.

As far as your credit goes, if they foreclose prior to your bk, both will appear on your credit bureau. If you bk before they foreclose, only the bk will appear on the credit bureau. It's simply a matter of timing.

If I may ask, what state are you in?

I hope this helps. Good luck!!!!

[HHM]

I wouldn't worry to much about the time line, you are "over thinking" the process.

It sounds like you are already in default (but its a little hard to tell from your post). A deficiency is not assessed until AFTER the auction. So you have many months before a deficiency will be assessed. You can file BK at any time before or after the deficiency is assessed and that debt will be included in your BK, so you don't really need to worry about timing in that regard. If you file BK before or during the foreclosure with the intent to surrender, then the deficiency is included in the BK, and if you file after the foreclosure is complete, the deficiency is included in your BK.

Making partial payments without an agreement from the mortgage company to accept partial payments is pointless and you would simply be throwing money away.

[One Half Full]

I'm in the situation of not having the money to pay for an attorney. My income tax refunds, as well as a about 2 months of not paying the mortgage will get enough to pay the lawyer. My lawyer can also help me to live in the house for 6-8 months (after they foreclose which is 3-4 more months). This will allow me to save enough to get an apartment.

[Catia]

HHM,
You bring up some really good points. I'd like you to expand on some of this, cuz what you are saying is sinking in, and well--I maybe on the verge of a "lightbulb moment"--so please help me get there!!!
Yes, I may be over thinking. But--I am not sure which part I am over thinking...
I am a very detail oriented person by nature, and research is what I am known to do well...I am trying to weigh the benefits/risks of BK and FC on my future credit. Because i will need to survive, I have limited abilities due to illness, so planning properly is essential, more essential than for someone who has the ability to work a steady job.

I am confused still about certain issues. 1st--if BK and FC are at the same time, it is counted as 1 incident, but foreclosure is still on credit report. Both BK and FC on credit rpt for 10 yrs no matter what--but--if BK and FC as 1 incident--In aprox 3 yrs, if you are religious about rebuilding your credit, you can have a decent enough score to have credit again...

2nd thing that confuses me--if FC must happen before BK, and I wait for deficiency judgement , and then go to BK ch7--in order to get deficiency discharged--how does that affect the ability to recover credit?? And can a deficiency judgement definately be removed in a ch 7 bk?
Any reasons why a deficiency judgement on an FC prop would not be allowed to be discharged in Ch7 bk later on??? Also--how soon after a deficiency judgement would I need to file BK? I've read that if judgements are allowed to remain for certain periods that bk courts will allow them to remain--is this true?

Once all of my paperwork is in order, I will do some 'free' consults with BK attornies, but I need to know which specific questions to ask, and also where my risks lay. Around here though, everyone I know who has had to file BK has been disgusted with their attornies lack of concern and attention to detail. I have spoken about BK with 5 people I know who have filed ch7 and gone through it. And, the "free" consults are often more an attempt for the atty to get your business, i.e.:they tell you what you want to hear to get you to sign with them. What actually happens is another story, and because these people are broke and have bad credit--they have no recourse to fight back. Most of the mistakes that were made by attornies could have been avoided IF the clients had done enough research before--if they understood the laws and codes. So basically, I would NOT use the attornies of the people I know who have filed, not even for a free consult-I only know 1 person who was allowed to keep their residence and a vehicle in ch7-1 out of 5!!! -it's like compounding a list of who NOT to use. This is really scary.

[HHM]

I am trying to weigh the benefits/risks of BK and FC on my future credit.

Frankly, that is your first mistake. Most people use "future credit" as an excuse or as a way to psychologically delay the inevitable. What you need to be focused on is your FINANCIAL REALITY. Can you afford the house, do you have other debt, what are your expenses, what is your income etc. Let those OBJECTIVE facts dictate your decision, not some "what if" pipe dream about future credit. The fact of the matter is, YOU WILL HAVE CREDIT IN THE FUTURE regardless if you go BK, FC, or Both.

2. You can discharge a deficiency AT ANY TIME. It does NOT matter when foreclosure actually starts or finishes. If you file BK and intend to surrender the house, the mortgage company will most likely make a motion to lif the automatic stay, and start foreclosure before you BK is complete. Keep in mind, the deficiency "exists" RIGHT NOW. All the foreclosure accomplishes is to liquidate the claim, but even today, if the house is worth less than what is owed, that deficiency balances exists now; which is why you can file BK at anytime before, during or after foreclosure and have the deficiency discharged.

If the house is the ONLY debt that you have that is causing problems, then you probably want to go the FC route. But if you have any other debt issues, then BK is the route you need to take, and if need be, surrender the home in the BK process.

[Catia]

HHM--Thank You!!!
"light bulb moment" accomplished.
I didn't consider it the way you explianed it...I had to read it a few times over, and you're right, it makes total sense. Fact is, I have so much fear tied up in this that the fear was preventing me from allowing me to look clearly at what needs to happen. That, and I also needed some other info to understand the process.

I think FC is the beginning of the process I need to start, and you cleared up the fact that it has already begun--Value of house declined, mort is for more than I can ever recover from house, so deficiency already exists, it's a matter of concept--I can either accept the "deficiency" as my unaffordable mortgage that I cannot pay-which is a secured debt to the house--which is what is happening right now--or I can allow the FC process, and deficiency judgement will be entered after FC, and the deficiency will be unsecured. I can later file BK to have this removed, and have a "fresh start". Am I on the right path for understanding what you were saying?

Next Question: Once FC is over, and deficiency judgement is entered--does mort co have the ability to attach the deficiency judgement to my current residence, or is that another process? How does that occur?
This is what I am most concerned about--I am concerned that the deficiency judgement will force the liquidation of my residence. Where do I begin to get info on how to prevent this, and how to protect my current home? IS the process that I am talking about what is often termed as "pre bankruptcy planning"???
Thanks!