foreclosure and bankruptcy
 

I have some decisions to make and Im weighing things out, but I ahve lots of questions. Its sorta funny because for work Ive handled all the paperwork regarding these things, but besides the paper shuffling I know very little. SO Im asking for insight from any who have gone through this stuff.

My old home is vacant, has been a while. The market everywhere is shot, and particularly here in this area. There have been no bites on paper ads and signs for the house (which needs some work) at $69,000. Not even any lookers. A realtor is meeting me there on Friday but doesnt think selling it for that price, or in that range should be a problem. (Is it there job to say that?)

Im making payments and have fallen behind. I got the intent to accelerate letter , I can fix it by the deadline (Jan 3), but Im trying to decide if I want to. Insurance is due Dec 26, I am not planning on paying it, I cant get in any deeper. I owe $47,000.

I only want to sell it to walk away. What happens if I sign it over to the bank? How does that appear differently than a foreclosure? Does it?
Now if I choose to do that, I may choose also to file bankruptcy. I know complete charge offs are harder to get, but I think I qualify if the house is gone. Does that wipe a foreclosure off your record?

How does rebuilding work?

Any insight would be helpful, because if I choose to proceed with selling now and rememdy the deliquencies, I could be looking at this same issue when I reevaluate in 6 months

aaahhh jeeze.. I know how stressful it all is Cinders...I went thru this myself with our marital home.

My exah and I did file for bankruptcy before the laws changed. We discharged all of our debt but we re-affirmed the house because my exah was absolutely sure that he was 'done' using drugs and we thought we would be able to save our home.

Of course, my exah wasn't as 'done' as he thought he was and we ended up falling behind on the house. When I left my exah, I also left our marital home behind. Although I struggled to keep up with the hefty mortgage payment on my own (on top of paying rent at my new place), I was falling deeper and deeper into the muck. Finally, I just decided that I was throwing good money after bad and I contacted our lender. They agreed to take the deed in lieu of foreclosure. We basically walked away from the house with nothing to show for it but the debt was included in our bankruptcy estate from the year prior and so we weren't any worse off credit-wise when we did this. I'm told that we were very lucky that the mortgage lender reported the deed in lieu as being included in the bankruptcy discharge (rather than as a foreclosure after the fact). It took alot of phone calls and letters to the lender to accomplish this feat let me tell ya !!!

Anway, it was the smartest decision I ever made. I was actually able to buy my new home just 2 years later...with a decent interest rate. I thought it would take a lot longer to re-establish my credit. Its amazing how I can actually pay my bills on time now that I'm not carrying the dead weight of an addict around anymore.

Have you contacted your lender in order to discuss your options? I know bankruptcy and/or a deed in lieu of foreclosure are options of a last resort but in my case, they were the only way out.

Good luck with everything...

Go to prayer and meditation and ask God to direct your thinking. Keep doing this until you get an intuitive thought. Then, listen to your intuition. Good luck.

Do you know how deed in lieu of foreclosure looks credit wise? That apparently is an option.

I should be able to get a charge off bankruptcy in that I have no assets (once house is gone) and my income only covers bare essentials of raising 3 kids (no child support, oldest childrens' dad serving a life sentence) and I have just under $5000 in charged off credit debts -(which I had hoped sale of house would wipe out.)
I just want to start fresh and start moving forward.

sounds like good advice to me from both your answers.
I keep saying we've got smart people on here!!!

Just a thought about the charge-offs. I have several from credit cards and I thought once they were charged off, I didn't have to worry about them. Turns out, a collection agency sued me (when I was still in active addiction) and won. I found out when the police showed up at my door with papers ordering me to respond (NOT a good feeling when you've been on the wrong side of the law).

I was able to make a payment plan with them, but still had to get a lawyer to know how to respond to the court (I used prepaid legal...about $30/month). This is probably due to the fact that this one debt was $4000. When another charge-off was sent to a collection agency, I went ahead and made a payment plan with them, too, because I was afraid they would sue me too. The lawyer handling it told me "just because it's charged off, does not mean you're not still responsible for the debt" - I honestly thought it did.

I hope you can get things worked out. I'll be paying off stuff 'til I'm 90....maybe then I can afford a decent nursing home:)

Hugs and prayers!

Amy

Yes we are in the process of that as well. I told them to sue me and get a judgment against me, and I told them to do it quick so they could still put a lien on the house. (theyve refused payments Ive offered)

I was hoping the house would sell to clear up all this debt from being with an active addict, cause God knows they have no intentions of suing him.

For today Ill just make no decisions until after the realtor does the walk through

Yeah, in this case that would be better for you. Kinda wierd - I get sued (when I didn't want to) and you can't get sued fast enough..why can't these people cooperate:)

I was just told that if I didn't work out an agreement with them, they could garnish my wages up to 25% of each check. It wouldn't be much, since I'm a waitress and depend on tips, but was also told they would get my entire income tax refund and THAT I don't want.

I'll keep my fingers crossed for you!

Hugs and prayers!

Amy

Guys,

I apologize for posting in this forum. It didn't occur to me that this is for friends and family. Best wishes to all.

Yeah, in Florida they cant garnish head of household or if you make $500 a week or less.

Thanks everyone for the advice

Wow Impurrfect. I found a few charge offs on my report, but they actually belong to my xah. Somehow my name is an authorized user on all the cards he didn't pay! lucky me. I got a few off my report, but there is one charge off that scares the pants off me. These debts of his were in the 30 thousand dollar range.
He agreed to "be responsible" for it in divorce papers, but that doesnt' mean they still can't come after me.
He hasn't worked in years. His mother takes care of his every need! Talk about enabling.
Shoot, now I am getting all scared. I guess I need to talk to a lawyer myself.

Wascally if your not getting calls from collection agencies I wouldnt worry about it, and in I thought if the divorce papers says he 's responsible it can be on your credit report but they dont come after you for it

Ok my morgage lender does deed in lieu of foreclosure and agreed sale in lieu of foreclosure. But what do those mean?

What happens if they auction house and get less than owed, cause we know whats happening at auctions right now.

Doesnt someone want a nice Florida home for $50,000? LOL

Wascally -

I think Cindi's right - if he claimed responsiblity in the divorce papers, they can't come after you. I didn't get the prepaid legal service until the day the cop showed up at my door, and they told me what to do right away, so I wouldn't worry about getting a lawyer right now. I still have about 10 other smaller debts that are charged off and they haven't done anything so don't worry about something that probably won't happen.

Funny thing is, the collection agency that sued me sent me a letter that basically said that they had looked at my credit report and decided that I could settle for a lump sum of $2500. I told them that if they looked at my credit report, what they saw was that I owed a lot of people a lot of money!

Cindi - glad to hear about the head of household. The only way I could claim that is if I counted the 4 cats as my kids (think it would work?)

Chase Bank Card is one known for pursuing any means to get there money. They are the only collection one that worries me and I got the same letter they will settle for $1200

don't know about you, but that might as well be $12,000 to me....so far I've got just enough to pay my current bills.

I don't know a thing about this, cinder, but I am sending you hugs and prayers. Love ya!

((((HUGS))))

I have not been a bank loan officer in almost 20 yrs. Laws are different now.

I would talk to an attorney first. Do they not do free consultations in Fl.?

You would be suprised at what a good RE broker can do-I would think a tent in Fl. would be worth $$$$...People are always looking for "fixer- uppers". Where are you in Fl.-I have friends there.(PM if you want)

Bills, we could trade-hehe. Hospital over $150,000 and the list goes on. Here, if you don't have it - they don't get it. If I had it they would get paid.

Some charge cards sell your acct. to a creditor-they try to collect-then sell it to another and on and on.

I finally took the phone #s off the caller ID and registered them with The Do Not Call registry. No calls anymore!

here is an article about deeds in lieu of foreclosure. it isnt different (credit report wise) than a foreclosure..it looks the same on a credit report and to future lenders as if you did foreclose.

http://www.homesalerelief.com/blog/d...-work-for-you/

my husband, before we were married, had a deed in lieu of foreclosure and when we bought our house there were no issues about it at all. the lender did ask us why he didnt just do a foreclosure, though.

good luck with everything!!

I read through that and found it interesting that both foreclosure and bankruptcy stay on your credit report so bankruptcy doesnt wipe out the foreclosure, and foreclosure looks better than bankruptcy-which kinda surprises me

yeah, its weird how all that works..but really, in the end, the lender - be it house, car, credit card, whatever - has the final say and will see either one as not so good. luckily, though, bankruptcy doesnt affect you for too long. mine was discharged in may and i already am on the loan with my husband for our house, have a car, and also have a gas credit card.

anyway, good luck!

Well heres what I learned from my lawyer.
They can come back and sue you even if it's been 7 years and the debt has not been collected, and it comes off your credit report!

I am only an "authorized user" on my xah's cards. But, by law, yes I can be held responsible for them because it was debt incurred during the marriage! Just because xh agreed to be responsible for them doesn't mean they can't sue me. :wtf2
They can sue me, I would have to pay. Then, I could try to take x to court to make him responsible as agreed in the divorce. LOL and HA HA, he hasn't got a penny! He wouldn't be able to pay.
So, that farging bastage would get off scott free and I would be in debt the rest of my life.
:saroll::uzi2:

That's the worst case scenario.

((((Cinders)))))
I'm clueless about this too but wanted to send you lots of positive thoughts. I know you will be lead in
the right direction and stay on your feet. You seem capable of handling everything thrown at you with grace and strength. Hugs.

Cinder - If you are considering bankruptcy then you would include the home. If that is the route you decide to take, there would be no purpose in doing a deed to the mtg. company. Just wrap it up all in one package. That is if you want a clean start from everything. Bankruptcy stays on your credit for 10 years, there are statute of limitation laws (different laws in different states) depending on if it is considered a lawsuit on credit cards, breach of contract suit... any number of things, but they only have so many years to file suit in or be barred. They will continue to try to collect for 7 years. If they get a judgement against you, then the judgement applies for longer and can be re-recorded after 7 or 10 years depending on the state. There are lots of plus's and minus's to all the options. A bankruptcy attorney can go over all those options and often times the first visit to them is free. It wouldn't hurt to just schedule one and maybe get some specific answers for your state. Even try googling bankruptcy options florida. Most of your questions have been asked by others and some attorneys have forums that respond online.

I hope your Realtor is able to help you.

B

Careful signing the house over my last house was a bank sale and the bank sold it for less than what was owed and went after the previous owner for the balance.

Gosh Ciner,
It's a shame you can't rent it out, us snowbirds up here are always looking for something to rent down there, especially if it's close to water.



Hugs, and crossing my fingers for you.

I wish I could buy it from you, because I'd love to have a little place up your way and as they say "they don't make land anymore."
I hope it all works out soon.
hugs

Hi Cinderella

I used to work in Forclosure. (no death threats please, I'm outta the business, it beat me down)

A Deed in lieu of foreclosure is a deed where the borrower gives all interest in the property to the lender to satisfy a loan that is in default and avoids foreclosure proceedings.

The deed in lieu ("DIL") of foreclosure offers advantages to the borrower. The primary "plus"is that it immediately releases him/her from most or all of the personal debt that comes along with the defaulted loan. The borrower also avoids the bad name associated w/ a frcl proceeding and may receive more generous terms than he/she would in a "normal" foreclosure.

In order to be considered a deed in lieu of foreclosure, the debt must be secured by the real estate being transferred.

Most likely your mortgage lender will not agree to a DIL until you have given them something in writing that states that the offer to enter into a DIL is made voluntarily.

Also, unless you can get your mortgage lender after the DIL is executed to mark your mortgage as "PAID IN FULL", the DIL will still show up on your credit rating which may make it a challenge to purchase property in the furture.

This is not legal advice as I cannot give it, but merely a suggestion. I would also research companies who purchase properties from individuals in your situations. There are many of them that make a living off of buying property that is "preforeclosure"

Best of luck and if you need some help, please PM me.

I have tried contacting those companies, noone is calling me back. Ive been calling for 6 months. Several down here have even gone out of business. I really need to find someone who wants to use it as a rental, as that would be the most prosperous for anyone who invests in it right now.

Thanks again everyone. The realtor never called me back...Im thinking how unprofessional for whatever reason, so Im starting fresh

realtors at least in situations like this are like used car salesmen. Is there other options you can search out in terms of posting a rental, such as craig's list? I'm not sure where you are located but that's a free way to post the rental.

Search out sites like that see it that will help.

I'm sorry for your troubles. You're in my thoughts!