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Should I file bankruptcy to avoid foreclosure?

I missed a couple of payments since the few months. The lender send us notices and also called up a few days back. He insist on doing a foreclosure. Do you think I can avoid it filing a bankruptcy?

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

You can file bankruptcy and avoid foreclosure. But its risky!!

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome Caitlyn.

Filing chapter 7 will also put a stop to foreclosure proceedings.

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helping_user's picture
helping_user | Joined: March 31, 2006 03:39 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Caitlyn,

Filing chapter 7 will no doubt stop foreclosure but it's temporary. As soon as the court gives the permission, the proceedings will start off.

I think filing Chapter 13 is better as it will give your creditors the impression that you have at least tried to pay a portion of your debts. And, it will also have a lesser negative impact on your credit report as compared to Chapter 7.

Thanks

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clowery's picture
clowery | Joined: December 26, 2006 03:09 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Caitlyn, you could file bankruptcy, but inevitably you will still lose your home if you do not make the payments. Your best option would be to [url=http://www.mortgagefit.com/refinance.html]refinance[/url]. Your interest rate would probably be higher than what you're currently paying, but if you have equity in your home we may be able to cash-in on that equity and avoid foreclosure by writing you a check for it.

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Caron's picture
Caron | Joined: July 19, 2005 08:37 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Clowery,

Welcome to our forums.

Thanks for your suggestions. Hope you enjoy participating in our forums. :)

Thanks,

Caron.

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lateniteboy_99's picture
lateniteboy_99 | Joined: April 1, 2009 02:46 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Yes you can file bankruptcy, but in the end you can lose your home if your not able to make payments..
[url=http://www.mortgagefit.com/know-how/filebankruptcy.html]Filing bankruptcy[/url] is just a temporary way to avoid and stop foreclosure..

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hello:
I am seeing many people say you may still loose your home if you file bankruptcy—what is the time frame. I have a lot of equity but not enough time to sell—the lender won’t work with me. If I file bankruptcy how long do I have and if I accumulate the money will I get to keep my home? Is there a bankruptcy that allows you to keep the home even if you don’t pay what is owed? I will be able to catch up the payments but not in time—the lender has already started foreclosure and is being very harsh. Not sure if they are trying to scare me or what. Since I do have so much equity I would hate to loose it. I have already tried to work out a repayment plan, loan modification, or asked to be allowed enough time to sell it and the lender says no. I missed one payment on my repayment plan and they proceeded with foreclosure and actually won’t even return any calls, etc.

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sara's picture
sara | Joined: July 5, 2006 03:16 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome mrl,

What type of bankruptcy are you trying to file? If you file Chapter 7 bankruptcy and reaffirm the mortgage, then you won't lose your home. However, you will have to make your loan payments. If you do not pay off what you own, you would not be able to save the property. The lender will foreclose it and recover his dues.

Did you ask your lender as to why he is not ready to give you a loan modification?

Take care

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knalaweyei17's picture
knalaweyei17 | Joined: July 25, 2009 11:45 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Bankruptcy is a federal court process designed to help people eliminate their debts or repay them under the protection of the bankruptcy court. [url=http://www.mortgagefit.com/bankruptcy.html]Bankruptcies[/url] can generally be described as "liquidation" or "reorganization."
When you file bankruptcy, an "automatic stay" goes into effect. The automatic stay prohibits most creditors from taking any action to collect the debts you owe them unless the bankruptcy court lifts the stay and lets the creditor proceed with collections.
Bankruptcy to stop foreclosure is possibly the least-understood and least-desired option for most homeowners, although it can provide them with the last chance they need to be able to save their homes. The drawbacks to bankruptcy are widely discussed and raise serious concerns for foreclosure victims who want to preserve as much of their credit as possible, but this option can also provide homeowners with a last chance that is not present in other solutions to foreclosure.

Bankruptcy can be used to set up a repayment plan that allows the homeowners to repair their credit and get back on track with their debts. Although it is usually an expensive payment plan, homeowners who have repaired their financial situations may be willing to pay more every month to fulfill their mortgage obligations. And once the bankruptcy is completed, homeowners can go back to paying their regular monthly payment without the threat of foreclosure hanging over their heads any longer.

In foreclosure situations, [url=http://www.mortgagefit.com/know-how/filebankruptcy.html]filing bankruptcy[/url] will put the entire foreclosure process on hold, which is very important for homeowners when the situation is getting out of control and they are running out of options at the last minutes. When a foreclosure auction is approaching, and there is no other way to stop the sheriff sale, filing bankruptcy will immediately put everything on hold, including putting off the sale of the property. In certain situations, this is the most important aspect of bankruptcy, as it just allows the homeowners to gain a little more time to put together or complete a more reasonable plan to save their homes.

However, there are also valid reasons why homeowners may want to consider bankruptcy to stop foreclosure as a last resort, rather than as their first line of defense. There are numerous methods that are available to stop foreclosure, and working with an attorney to file bankruptcy may not be the most appropriate solution in every case. Foreclosure situations are always unique, and deserve a serious evaluation to determine the best way to save the home.

Filing bankruptcy can be a complex process that is expensive and may not bring about the desired results, in addition to harming the homeowners' credit. When the homeowners' finances have not sufficiently improved to the point of being able to afford the repayment plan, the bankruptcy is doomed to failure from the very beginning. Foreclosure victims should not agree to a repayment plan that they know will be unmanageable in the long run, because missing a payment in bankruptcy means that the foreclosure process will start back up.

There is also the possibility of running across an unscrupulous bankruptcy attorney who does not act in the best interest of the foreclosure victims. Horror stories abound of homeowners who paid for the bankruptcy to be filed and the attorney simply did nothing with it, resulting in the loss of the home to foreclosure. Other attorneys have been known to advise clients to continually switch from a Chapter 13 to a Chapter 7 and back and forth over and over again, in an effort to have the clients pay substantially more in fees for each new filing. Although the vast majority of attorneys will act in the best interests of their clients, it is important that homeowners be aware of potential scams, even among bankruptcy lawyers.

Thus, bankruptcy is a solution to foreclosure that most homeowners should examine with a reputable attorney, even if it is just to have a last-ditch effort to stop foreclosure on their homes. Foreclosure victims need to be aware of the implications of filing bankruptcy, and do their best to avoid being taken advantage of by a scam, but this option should not be ruled out entirely. Despite its complexity, drawbacks, and potential pitfalls, filing bankruptcy to stop foreclosure may give homeowners that one last chance to put the foreclosure process on hold for just long enough to find a more reasonable solution.

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