Ughhh...foreclosure

[klmno]

I just got my notice today. My house is moving into forclosure so unless I do something to stop it, it gets listed in 2 weeks. I guess that's what I get for Thanksgiving.

Is this worse on credit than bankruptcy? Can a person even file for bankruptcy without having a job? Once it's listed in the paper, about how long will I have to get out of the house?

 

[Mattsmom277]

Gosh I don't know a thing about foreclosure or bankrupcy in the US. Here in canada, bankruptcy stays on your credit for 7 years and anyone can go bankrupt. Unemployment is probably the leading cause of people filing. I do know from reading that US policies are different, so don't know any answers for you. I do want to say I'm so sorry . This economy is knocking so many people on their behinds and its so sad to see.

 

[klmno]

thank you- is the economy as bad in Canada as it is here? This has really hit me hard- I thought I had more time before this happened. I mean, I knew it would get turned over to attnys this month, but I thought they gave more than 2 weeks before actually listing it. This can be a problem for difficult child's release to me.

 

[DazedandConfused]

As far as I know Chapter 7 bankruptcy is the worse and stays on your credit record for ten years. Foreclosure stays on your record for seven years. You do not have to have a job to file for bankruptcy. There's chapter 7 and chapter 13. Chapter 7 discharges all debts. Chapter 13 is when you negoiate with your creditors to come up with a pay plan. But, of course, this only works if you have a regular income.

I don't know about Foreclosure.

I'm so sorry about what you are going through. husband's company, that has been in business for over 50 years just filed for Chapter 11 bankrupcy on Monday. We are crossing our fingers that it doesn't go under. He's already taken a big pay-cut along with business being down which also cuts into his pay. We are hanging on by our finger nails right now.

 

[klmno]

Also, I'm getting stuff in the mail about debt reduction and other options for salvaging some credibility. These things refer to the national debt relief program but it's not clear to me if this is legit or coming from a company that's just going to cause more problems. How can I find out? In one case, it says it's coming from the "US Debt Help Center" and another doesn't list a company name but refers to "EJS Services". Both are printed to look like official government forms.

 

[flutterby]

Bankruptcy is better than having a foreclosure on your report - however, you will still have a foreclosure showing. However, the mortgage company can come after you for the difference between what they sold the house for and the balance on your mortgage. Whether they do or not depends. They wrote mine off, but mine was through Countrywide and they were bought out by BoA as a rescue.

Foreclosure proceedings vary by state. Here, they had to hold the sheriff's sale 30 days after the listing. Then after it sold, it took about 30 days to record the sale. So, that was two months that the house was still mine.

 

[flutterby]

I wouldn't trust anything you get in the mail. There are too many companies willing to make money off another's misfortune.

Find out who handles your area housing relief. There is probably a government website listing that information.

 

[svengandhi]

Those offers in the mail are scams. Call your local bar association and see if they have any clinics or lawyers who are doing pro bono work. In my area, I know a bunch of attys who are volunteering and taking these cases.

 

[klmno]

OK- thanks! So, Heather- you could still live in the house 2 more months? That would help. I need to get difficult child in my custody before I lose the house or I need to already be a resident where I can provide a home somewhere else.

 

[donna723]

Those unsolicited offers that come in the mail ... I wouldn't touch them with a stick! The majority of them are scams but they try to make them look like they came from government agencies. A legitimate government program wouldn't be soliciting YOU, it would be the other way around. And the "national debt relief program" they're talking about is probably bankruptcy! They are probably some kind of "debt consolidation" loan company that charges outrageous fees and interest. I've heard of some of these places charging a fee, supposedly to to get you out of debt, then they disappear with your money!

If I were you, I'd find a legitimate attorney that specializes in bankruptcy and talk to them. Some have a free consultation. They should be able to tell you if bankruptcy is your best bet or if there is some kind of government program that you could take advantage of. I don't know anything about foreclosure or Chapter 7 bankruptcy, but I filed for Chapter 13 several years ago and it just got fully paid off a few months ago. I know it ruined my credit rating but by that time it was already trashed anyway and it was the right thing to do at the time.

 

[DaisyFace]

K--

RE: Bankruptcy...

Chapter 7 is the total liquidation option....all of your assets will be evaluated. Then a certain amount of personal property will be determined "exempt"--it varies state by state but in general, you are allowed to "exempt" personal items such as clothing, household furnishings and tools of your trade up to a certain dollar value. Any property that does not qualify for exemption can be sold to settle your debt.

Chapter 13 is also called the "wage earners plan". Instead of selling your property, you must submit a plan to repay the debt within 3 to 5 years (a bankruptcy attorney will help you determine the sort of plan you can propose based upon your discretionary income). If you do not have any "discretionary income" as determined by your states means test (which is based upon median wages in your area), then you will not qualify for Chapter 13.

Either way, however, YES a bankruptcy filing will buy you time. The second you file, you will halt any collection or foreclosure proceedings in their tracks. Then you will be required to attend a court-approved credit counseling program and then you will get a scheduled court date.

If you qualify for a Chapter 7 plan....you can live in your home for the two months in will take to go through the process....and then you can liquidate the house and anything else you won't want to take to HI anyway....discharge ALL the debts and get a fresh start in a few months when you start your new job.

Anything negative, whether a foreclosure or a bankruptcy, can stay on your credit rerport for up to ten years.

If you file Chapter 13...you will need court approval to apply for a car loan or credit card or anything like that while you are still completing the terms of your payment plan.

If you file Chapter 7...you are free to get a car loan or anything else you want without court approval. If you make all the payments on a car loan after bankruptcy, it helps to restore your credit fairly quickly.

Hope this helps...

Good luck!!

--DaisyFace

 

[donna723]

Yeah, I forgot that part! While I was in Chapter 13 bankruptcy, five long years, I could not get any kind of loan, finance anything, or incur any kind of debt without the court's approval. And they take their sweet ol' time too!

My car was amost paid for when a deer ran out in front of me on my way to work and totalled it - the car and the deer! Biggest mess I ever saw! My landlord (bless him!) is a car dealer and I got a cheaper car from him that would be almost paid for with the insurance check from the more expensive wrecked car. But because I was under bankruptcy, the insurance company sent MY check to my attorney, who didn't bother to tell me they had it! If this hadn't been someone I knew very well that I was buying the car from, I wouldn't have had a way to get to work! He had told me to just give him the few hundred dollars difference when I had it, I never signed any kind of loan document with him, but the court considered it to be FINANCING part of the car - it took six whole weeks before they approved the "loan" and finally approved it for MY insurance check to go to him as the payment on the car!

 

[klmno]

Ok, with Chapter 7, do you get to keep 1 car if it is already paid for or do they take it? (Not saying I would take it to HI, but just wondering.) Sorry- that part just come across clear to me.

 

[BusynMember]

Never went through a foreclosure, but are going to declare Ch 7 bankruptcy. Have heard conflicting reports such as it is worse not to file and to have the bill collectors knocking on your door...you can build up credit. But we don't plan on new cars or buying a new house at our age...we're going to downsize when the kids are gone...I wish you luck and hope everything works out for you. Unfortunately, the economy stinks.

 

[witzend]

Have you tried the Loan Modification program yet? You should contact your lender.

 

[klmno]

Witz, they told me that I have to have a job in hand first.

 

[donna723]

A co-worker filed for Chapter 7 and she got to keep her car. But hers was older and it was paid for.

 

[klmno]

Ok, mine is paid for and over 8 years old. If I kept it but went to HI, could I then sell it for some cash to buy another in HI? They would never know would they? Of course, that would be some beater that I'd have to buy for that amount of money. LOL!

 

[susiestar]

Thanks to all who explained all of this. We are good for a while yet, and husband has a LOT of irons in the fire. But it is always good to know.

Our loan is held by a major bank. We were NOT a subprime loan. husband made the mistake of accepting an offer by the loan department to pay the mortgage in 2 payments a month instead of one. It would let us make extra payments each year because he got paid every 2 weeks instead of monthly or bimonthly.

Instead of setting things up properly in their system, the bank held two checks and then said that they were late. They cashed them and didn't bother to post them to any account.

I had a very good friend who asked if we were having real problems and if we knew our home was listed as foreclosure?

We don't get the paper so we didn't see the listing.

We were HORRIFIED and TERRIFIED! We eventually found a company that helps with mortgage defaults. They had good reviews and no trouble with the Better Business Bureau, so we asked them for help.

We had to pay them a fee (about $800) and then they took over the entire problem.

The bank did all sorts of things from lieing to us saying that they would help us do the refinance and we didn't have to pay the company to filing an EVICTION notice and trying to get the Sheriff to evict us before the foreclosure sale.

As it turned out, this bank was not doing it to just US. They had some people in a regional office doing this to hundreds of people!! We ended up getting credited for 3 months that we didn't have to pay (ever - it was part of the deal that they signed and then tried to get out of), getting new people who are very helpful in that office and several people including vice presidents got fired.

Much of what the bank did was illegal in our situation - and they KNEW it! It is a HUGE bank with thousands of mortgages and they thought that they would just get away with it because none of the clients would call in some help.

You DO have another option. Sometimes a bank will let you do a "deed in lieu of foreclosure". My bro's ex had to do this early in their marriage. They had a certain date to be out by, bro did a few repairs (fixed siding on the garage that had rotted off, walls her sons put holes in when they were mad, etc... We also helped repaint. Part of their agreement was having the house in shape to immediately go on the market.

So it did not have as bad a mark on their credit.

I hope that this does not cause you extra stress and worry!

 

[flutterby]

You can also do a short sale. That is where you sell the house for less than the balance owed - between 80% and 90% - and the bank writes off the rest. The bank has to be in agreement and has to approve the buyer. However, they can 1099 you for that difference and you might have to pay taxes on it. You would need to talk to your tax accountant about that.

The thing is, it's easier to bounce back from and rebuild your credit from a bankruptcy than it is from a bunch of late and/or missed payments.

If you do a Chapter 7 bankruptcy, which you would have to because you don't have any income to do a Chapter 13, you wouldn't need permission to buy a car. Once it's finalized, the Court is out of your lives. And you can get a car loan or buy a house in about 2 years. You'll have a really high interest rate, but you can rebuild.