Does Filing BK speed up foreclosure process?

[Rob517]

I am planning to file soon. I am in MI and will hit 90 days late on mortgage on Sept. 1st. I assume they will start foreclosure proceedings soon after. I will be giving up the house in BK. Will filing BK allow the mortgage company to speed up the entire foreclosure process and eliminate the redemption period? I would like to file and get this over with but need a couple more months to save to move out. I was delaying to give myself a little time assuming they could move faster if I filed but wanted to ask the BK guru's here to get an opinion.

I know a lot of mortgage companies take a while to get foreclosure completed due to the huge numbers of people defaulting, but I was trying to figure out the quickest they could get it all done so I could figure out how much time I have to stay.

Thanks for the help...again..

[Funk4Crunk]

My personal experience

The last mortgage payments I made on my home and a rental were in October of 2008.

Neither servicing company took any legal steps, just letters (probably required by law).

I filed for BK7 on January 30, 2009 and it closed in early May of 2009.

FYI - while the BK is open, there is an automatic stay order where creditors cannot harass you.

That includes secured creditors.

However, they can file a Motion to Vacate the Stay Order for the property before the BK is closed to move forward with the foreclosure.

Although both properties had such motions approved (the rental was on 03/13 and my home was on 3/24), the rental did not start the foreclosure process until 7/30/09 and I have still not been served for my home as of this post on 8/26/09.

Then, in this county, there is a 30 day period to file an Appearance and/or an Answer. I have done both (the Answer was a 19 page "term paper", certified under penalty of perjury, about fraudulent actions and property record creation with 25 Exhibits of evidence submitted).

The status date isn't until December! However, no one will give me "legal advice" on what that means in relation to the 30 day period ending this week. I want to BE DONE with this rental property!

Caution - once you hire a BK attorney, no creditor or servicer will talk with you, so get any other legal information first.

Since foreclosure law and BK law are not the same, the minute I hired my BK attorney, I was unable to get legal answers related to the upcoming foreclosures (not even mention of "deed in lieu of foreclosure") or for any other legal issue (like hearings for City Code Violations that violated that stay order!)

I have been told by several people that foreclosures are more damaging than BK. The real issue is that my BK7 was *not* a "clean slate" - I'm having an ongoing battle with likely *two* foreclosures still as stressors in my life.

That means it may be 1-2 more years before I can start rebuilding my credit rating (which may be totally irrelevant by then).

My personal belief is that so many mortgages are in default that the banks are *avoiding* filing lawsuits (both of my banks still have a principal outstanding amount when it was *discharged* in the BK7 - accounting fraud?)

A phone call last week from my home servicer indicated that my foreclosure would be final in June of 20*10*, that it was indicated as "on hold".

Huh?

Hey, if I can live "rent-free" until next June, I'm all for it!

Except for the windstorm that required $450 for an emergency tree cut-down (that could have fallen on my neighbor's car)! And the above ground swimming pool maintenance when I don't use it at all-

[justbroke]

The last payment on my Investment (rental) property was January 2008. I have not been foreclosed upon, filed BK in July last year, and still awaiting a new sale date. The bank just recently send a Notice of Default on the property.

I'm thinking it may actually foreclose this time (September/October).

Bankruptcy does not speed up this process... it can actually slow it down!

[StartingOver08]

I had two remaining properties when I filed Ch 7: one rental and one primary residence. I have not paid since May 2008 and the foreclosure process has slowed to a crawl. Since I was discharged Jan 2009 - I have received some correspondence from the attorneys that are 'working on the foreclosures' but there has been no sale date set, no final judgment and seemingly no real effort to foreclose. Both properties were surrendered in the Ch 7 but still remain in my name. I plan to stay here in my primary residence until the final judgement is issued, just like my attorney suggested.

I showed a house last week and the foreclosure was started in 2005 and has not been completed yet! NO ONE has ever lived in the property! (Of course that one is serviced by Countrywide/BOA!)

[Rob517]

The last payment on my Investment (rental) property was January 2008. I have not been foreclosed upon, filed BK in July last year, and still awaiting a new sale date. The bank just recently send a Notice of Default on the property.

I'm thinking it may actually foreclose this time (September/October).

Bankruptcy does not speed up this process... it can actually slow it down!

So when your sale date occurs, is there no redemption period since I assume you surrendered your house in the bk or does that not matter? Thinking logically, why would there still be a redemption period since you gave the house back and would not need the option of redeeming it with a lump sum of cash? Am I on the right track?

Thanks to the replies...I've been reading post after post on here over the last few weeks and its really been a big help.

[justbroke]

So when your sale date occurs, is there no redemption period since I assume you surrendered your house in the bk or does that not matter? Thinking logically, why would there still be a redemption period since you gave the house back and would not need the option of redeeming it with a lump sum of cash? Am I on the right track?

There is still a redemption period because it just follows State non-bankruptcy laws. The reason for the foreclosure under State law, is because the whole process still must be followed. Surrendering isn't really surrendering.

There is nothing in State law that says "the redemption period is void if the person is insolvent or doesn't have the financial means". Many people that are able to redeem, actually get a new loan.

[sunshine09]

We just moved from Michigan. We made our last payment (GMAC) in Nov. 2008. Filed for Chpt 13 in Jan. We got our notice of sheriffs sale on July 4th (though that was so fitting...YEA FREEDOM!) for a sale to be held July 29th. In Michigan, you have 6 months redemption period after the sale before they can force you out.

We moved out last month. Left our keys on the counter & locked it up. Hubby finally called GMAC, & I believe they offered a deed in lieu. Too late for that buddy....so I have no idea if our house sold that day, or went back to the bank.

Anyways, that was our experience. We did ask for cash for keys a few months back, but they declined.

Glad to finally be out of Michigan!!