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Is it better to surrender your house in chapter 7 than to allow foreclosure?
Wiki User
∙ 15y ago
Mortgage loans can be discharged in Chapter 7 bankruptcy proceedings so that homeowners no longer have to worry about paying an expensive loan when their income has dropped. But with a discharge, the owners will not be able to keep their house, as the bank will receive the collateral back as a result of the loan being eliminated. So there must be other reasons for owners to consider this tactic, since it does not actually save the house.
The main benefit of doing this is that homeowners are able to stop foreclosure from moving any further along in the legal process, meaning no more court documents, lawsuit paperwork, sheriff sale dates, or eviction hearings. Even if the borrowers move out of their house before the foreclosure process is complete, the courts will still move ahead with the necessary procedures to sell the house to satisfy the mortgage lien. Discharging the mortgage through bankruptcy ends this sequence of events.
Another important reason to consider filing Chapter 7 to eliminate the mortgage and move out of the house is the possibility of avoiding deficiency judgments after foreclosure. Although few banks sue again after the sheriff sale for any difference between what was owed and what the property sold for, it may be best just to discharge the mortgage and not worry about any further lawsuits regarding this property.
Bankruptcy is an important legal defense that homeowners have against unmanageable debt burdens and aggressive collections efforts, whether they are from credit cards, collection agencies, or mortgage companies. Collectors will never give up trying to go after a debt, and every day of the foreclosure process can be a nerve-wracking experience. Although the social stigma of bankruptcy may be severe, many debtors will liberated and generally much feel better with a fresh start and no extra debt.
Wiki User
∙ 15y ago
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Does the state of Illinois allow mortgage companies to sue for a deficiency judgment after the foreclosure?
yes
How can you find Foreclosure properties?
There are a number of websites that allow one to find foreclosure properties to buy. One can find listings of such properties on 'Realty Trac', 'Zillow' and 'HomePath'.
What is better loan or surrender value from life insurance?
Cash value loans will allow you to keep the policy in force and preserve coverage (sometimes for a lower benefit amount). If you decide to cash out the surrender value instead, your policy will lapse and you lose the life insurance protection.
After foreclosure can the bank garnishee your wages for the difference of what you owe and what the house sells for?
If they can get the court to allow this. Consult with an Attorney.
What does it mean Foreclosure hold state?
Foreclosure Hold State signifies the ability to place a foreclosure action on hold. Meaning if there is a typical borrower forebearance review, litigation/contested action, the foreclosure is placed on hold to allow time for forebearance or contested action to be reviewed. Saves both borrower (if attempting to reinstate/payoff loan) and Servicer, with avoidance of fees/costs accumulating due to foreclosure actions.
Who would you file paperwork with to file for a foreclose?
I got the impression that the mortgage company does the filing of the foreclosure in California and then takes the property and you just allow this to happen if you can't pay up. I don't think you have to file for a foreclosure.
How do you answer a foreclosure complaint?
State's establish laws concerning foreclosure action. Not knowing the state or the exact nature of the foreclosure document ( "Right To Cure" letter, forclosure notice, etc.), it is not possible to give a specific answer. If it is a letter of demand, the only response to such is for the borrower to adhere to the terms stated in the letter. A notice of foreclosure generally outlines the time in which the borrower has before the property is sold, whether the borrower has redemption rights, and so forth. Some states allow self-help foreclosures as outlined in the lending contract, some only allow foreclosure through judicial procedure, some allow either depending upon the individual circumstances. The only other option is to contact the lender and try to resolve the problem.
If your house is in foreclosure but you hold the deed can the bank sell it?
Yes, that process will be completed by the foreclosure proceedings. The bank is foreclosing (or recovering its interest in the loan) on the mortgage which is "guaranteed" by the property, to put it in simple terms. The foreclosure process will only allow the mortgage holder to recover the amout of its loan and associated fees, etc.
Can attorney put a lien on Chapter 7 home?
It depends what the court will allow in the processing of a Chapter 7.
If your home is foreclosed on are you still liable for the mortgage?
To answer this we would need to know where the home is. States such as California only allow lenders one action, which is usually the foreclosure. After that they can not be persued. A second mortgage however, may persue if they did not do the foreclosure. Other states allow for deficiency balances to be persued through collection actions and the courts.
Can you surrender a pond in chess?
You can sacrifice a pawn but the rules do not allow for a player to surrender a pawn . The pawn must be captured in accordance to the rules of chess .
Can do bankruptcy after forcloseur?
You can always file BK, but if everyting has been done in the foreclosure process- then filing BK wont allow the property to ber "returned" to you. If you are worried about a deficiencu judgment after a foreclosure, then yes, a BK would eliminate that liability.
