If we let our house go into forclosure what happens since we are going bankrupt?
and if the house sells at a Sheriff’s sale because of forclosure and it does not sell for the price that we owed the mortgage company, are we still responsible for the balance since we are filing bankruptcy?
Posted February 7th, 2010 in How To Go Bankrupt. Tagged: filing bankruptcy, forclosure, mortgage company.
That would depend on what type of bankruptsy you are filing and when you are doing it. If you file before your house goes into foreclosure you might be able to include it so it buys you time. The lender has to wait until your bankruptsy is discharged before they can do anything, it kind of locks them out.
If your house does go into foreclosure before you file, and if there is a bank sale (sherrif’s sale in some states) you will be responsible for the balance. It will appear as a judgement on your credit report so you cannot include it as part of your bankruptsy. Your best bet is to sell the house if you can’t afford the payments anymore.
February 7th, 2010 at 9:24 pmI’m not an expert, but let me play one on the Internet. Here’s what I think: If you enter foreclosure before you declare bankruptcy, you will lose the house. If you declare bankruptcy first, and the house is your residence, you may have some protection against being turned out into the street. The laws have become less favorable toward debtors since I learned about bankruptcy, so check with a lawyer. The bankruptcy lawyer (GET A LAWYER!) will advise you as part of his services for a reasonable fee. Don’t delay and let the bankruptcy just happen to you.
February 7th, 2010 at 9:24 pmI believe you could be… however, from what I understand, seldom does anyone "come after you" for it. A friend of mine experienced this many years ago, and the house sold for under what she owed. No one ever came after her for the remaining balance.
February 7th, 2010 at 9:24 pmIf you file for bankruptcy, would have to be Ch. 7 and include it in the bankruptcy, you may be able to stay in the house for up to 1 year, depending on your state laws.
February 7th, 2010 at 9:24 pm