Most homeowners think that filing bankruptcy to stop foreclosure is a better way to go. However, this one fast “quick fix” solution is costing homeowners everything. In fact, most homeowners who file a BK to stop foreclosure are stuck with 10 years of bad luck…Wait, you thought that bankruptcy was only for seven years, right?
Homeowners who file bankruptcy to prevent a foreclosure are more likely to have this bad debt on their credit report much longer than the normal seven years!!
“Plus who really wants an foreclosure reporting on their credit report for even seven or ten years??”
Bankruptcy To Stop Foreclosure
So here is how it works, the borrower falls behind with marking mortgage payments.
The borrower then receives a notice from the bank that the property is going into foreclosure, allowing a very short time-frame to clear the default.
Next, the borrower rushes out to file a bankruptcy just to buy time and to stop the foreclosure.
The borrower is typically not looking to even complete the bankruptcy. Only filing as a blanket shell (which is also not legal) and later having the bankruptcy kicked out of court for failing to make payments and never submitting additional required forms.
Most borrowers looking to stop foreclosure through a Bk filing never turn in their schedules. Which then causes their bankruptcy to be Dismissed. Not Discharged but Dismissed by the courts for failure to comply with court rules.
Once the borrower misses making payments during the bankruptcy payment plan the lender can then request to Lift Automatic Stay protection. This then grants the lender permission to take the house out of the BK and sell the property at a foreclosure auction.
The BK Dismissal remains on the borrower’s credit report for 10 years not 7!
Your credit is an Asset and you should protect it.
Without good credit it is impossible to do almost anything.
Selling a property oppose to filing Bankruptcy is the best option.
However, in a foreclosure situation it is really hard to have enough time for open houses, repairs, promotions, and so on.
This is where Ultisky Real Estate “UREH” can help fast. We are investors we don’t care about the property needing repairs and will buy ALL CASH AS IS!
Stop before you file bankruptcy, Save your credit call us today (470) 362-7887!