Posted on: 31st Mar, 2006 03:31 pm
How does a deed in lieu look on a credit report,and compared to a bankruptcy
Hi msnover!
Welcome to forums!
In a deed in lieu, the credit score is dropped by 250 points. But you should also remember that the deficient amount resulting from the sale of the property is also forgiven in the deed in lieu process however, you will have to pay taxes on the forgiven amount. A deed in lieu will remain on your credit report for 7 years.
As far as bankruptcy is concerned, it should be the last option for any borrower in my opinion. Filing a bankruptcy will affect your credit score and lower it by 200-250 points. However, you should note that if you file Chapter 13, it will remain in your credit report for 7 years but if you file Chapter 7, it will remain in your credit report for 10 years.
Sussane
Welcome to forums!
In a deed in lieu, the credit score is dropped by 250 points. But you should also remember that the deficient amount resulting from the sale of the property is also forgiven in the deed in lieu process however, you will have to pay taxes on the forgiven amount. A deed in lieu will remain on your credit report for 7 years.
As far as bankruptcy is concerned, it should be the last option for any borrower in my opinion. Filing a bankruptcy will affect your credit score and lower it by 200-250 points. However, you should note that if you file Chapter 13, it will remain in your credit report for 7 years but if you file Chapter 7, it will remain in your credit report for 10 years.
Sussane
I suggest EVERYONE on this page who has questions consult a qualified and reputable attorney. Bankruptcy is NOT always the worst option. Short sales and deeds in lieu could leave you with major deficiencies and tax liabilities, but chances are that you don't have much to sue for if you are stuck already. Most banks are not going to incur the cost of chasing you for repayment when you couldn't even make your mortgage payment in the first place. They are more to blame for this foreclosure epidemic than most of the people who can't make their payments. As well as all the predatory brokers who were pushing their products. Not to say they won't come after you because they have the right, but your state might not even give them the right to sue for the deficiency. Illinois does give the bank the right to pursue the shortage, but many states don't allow it.
Bankruptcy might be your best option.(I say MIGHT because I'm not going to pretend that I am qualified to give you the correct advice even though I know as much about these topics as anyone else here telling you what to do.) How long is it going to take you to correct your situation as it currently stands? Chances are it MIGHT take you 7-10 years to turn things around anyway. You are not a bad or stupid person for getting into a rough financial situation. Now if it is your second or third time considering bankruptcy or foreclosure, then maybe you need to be educated more on money and financing. You are a burden to yourself, your family, and everyone else if you are a repeat offender.
Why not start fresh if you are in such a deep hole? Bankruptcy will allow you to get a new home sooner than a foreclosure will. A short sale or deed in lieu will speed up that possibility a bit more, but you need to be absolutely sure the bank won't pursue the money and the IRS won't send you a huge bill.
You HAVE to get off this website and find someone who can give you the proper advice based on your specific situation and what state you live in. The conflicting information on this website is not going to make things better. The most important task for you right now is to find an honest and reputable attorney. No one likes to talk about money, bankruptcy, and foreclosure so they won't be too willing to recommend someone. Just don't call someone you saw on a TV commercial. Those guys are scumbags for idiots who watch fake court shows and Jerry Springer all day. Take a few hours and find someone who will give you the most beneficial advice for your situation, not the most profitable for his practice. The best attorneys will turn down your business if they can't provide you with the best case scenario. Good Luck!!!!
Bankruptcy might be your best option.(I say MIGHT because I'm not going to pretend that I am qualified to give you the correct advice even though I know as much about these topics as anyone else here telling you what to do.) How long is it going to take you to correct your situation as it currently stands? Chances are it MIGHT take you 7-10 years to turn things around anyway. You are not a bad or stupid person for getting into a rough financial situation. Now if it is your second or third time considering bankruptcy or foreclosure, then maybe you need to be educated more on money and financing. You are a burden to yourself, your family, and everyone else if you are a repeat offender.
Why not start fresh if you are in such a deep hole? Bankruptcy will allow you to get a new home sooner than a foreclosure will. A short sale or deed in lieu will speed up that possibility a bit more, but you need to be absolutely sure the bank won't pursue the money and the IRS won't send you a huge bill.
You HAVE to get off this website and find someone who can give you the proper advice based on your specific situation and what state you live in. The conflicting information on this website is not going to make things better. The most important task for you right now is to find an honest and reputable attorney. No one likes to talk about money, bankruptcy, and foreclosure so they won't be too willing to recommend someone. Just don't call someone you saw on a TV commercial. Those guys are scumbags for idiots who watch fake court shows and Jerry Springer all day. Take a few hours and find someone who will give you the most beneficial advice for your situation, not the most profitable for his practice. The best attorneys will turn down your business if they can't provide you with the best case scenario. Good Luck!!!!
Hi,
We bought our property in 2005 and now the prices have gone down by 43%. We got the loan for 5 years ( ARM) and next year it would be time to adjust/refinance. Meanwhile during last year both of us went thru a rough medical situation, my husband was diagnosed with cancer and i am on dialysis. i don't work due to my health conditions and my husband is working part time currently and will resume full time in about a months time.
Based on our medical condition we wrote a hardship letter to the Lender stating our situations and accordingly reduce our payments and make it affordable.
To our surprise they did not consider our situation and are asking us to either do Deed in lieu/short sale/foreclosure, we do not what should we do.
We have never been behind on our monthly payments till now but we can't do further payments if they don't lower it down.
I would appreciate some feedback on my situation.
We bought our property in 2005 and now the prices have gone down by 43%. We got the loan for 5 years ( ARM) and next year it would be time to adjust/refinance. Meanwhile during last year both of us went thru a rough medical situation, my husband was diagnosed with cancer and i am on dialysis. i don't work due to my health conditions and my husband is working part time currently and will resume full time in about a months time.
Based on our medical condition we wrote a hardship letter to the Lender stating our situations and accordingly reduce our payments and make it affordable.
To our surprise they did not consider our situation and are asking us to either do Deed in lieu/short sale/foreclosure, we do not what should we do.
We have never been behind on our monthly payments till now but we can't do further payments if they don't lower it down.
I would appreciate some feedback on my situation.
If you want to get rid of the property, then I think a deed in lieu of foreclosure would be a good option for you. This will help you in selling off the property and you would not be responsible for the deficient amount resulting from the sale. However, if you want to save your property, then you'll have to negotiate with your lender regarding a loan modification.
I have to move to another state because of my job and i have been trying to sell my house without any success i rented it out but its not enough to cover my mortagage, i just recently found out the mortagage increased even though i have a fixed rate loan, can i do a deed in lieu? my mortagage is with ditech and i cannot afford a foreclosure it will impact my security rating as a financial risk and i will lose my job
Hi Toddie,
You can definitely apply for a deed in lieu of foreclosure. However, the credit effects would be similar to that of a foreclosure. Your credit score would get reduced by 250 points and it would remain on your credit report for 7 years. However, you won't have to pay the deficient amount from the sale of the property to the lender in deed in lieu.
You can definitely apply for a deed in lieu of foreclosure. However, the credit effects would be similar to that of a foreclosure. Your credit score would get reduced by 250 points and it would remain on your credit report for 7 years. However, you won't have to pay the deficient amount from the sale of the property to the lender in deed in lieu.
hi king,
forclosure,bankruptcy and deed-in-lieu of forclosure on your credit report
may lower your credit score or make it difficult to be approved for new credit in the future.
forclosure,bankruptcy and deed-in-lieu of forclosure on your credit report
may lower your credit score or make it difficult to be approved for new credit in the future.
Hi,
Our bank has seemingly cleared me for either a short sale or a deed in lou? We'd like to just be done.
Which will hurt credit for longer??
thanks guys,
Seattle
Our bank has seemingly cleared me for either a short sale or a deed in lou? We'd like to just be done.
Which will hurt credit for longer??
thanks guys,
Seattle
What about a bankruptcy AND a deed in lieu? How does that affect credit? We were discharged ch 7 recently and now our short sale was botched. So we are looking to do a deed in lieu. We included the house in the bk.
Welcome Guest,
A bankruptcy will lower your credit score by 200 points whereas a deed in lieu of foreclosure will lower your scores by 250 points.
A bankruptcy will lower your credit score by 200 points whereas a deed in lieu of foreclosure will lower your scores by 250 points.
Applying for a deed in lieu depends mainly on the financial situation of the person. Deed in lieu will affect your credit scored less compared to if you apply for bankruptcy as long as you continually pay for your taxes. However, deed in lieu will put you at risk of losing your property, whereas, bankruptcy will give you the benefit of keeping your bankruptcy. It all depends on your financial situation.
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