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declaring bankruptcy

admin — Mon, 03 Aug 2009 03:05:11 +0000

What’s the Difference between Bankruptcy and Foreclosure?

One must decide whether or not to choose bankruptcy or foreclosure. It is not usually easy and is rarely acceptable to make a decision that is black and white. If monthly mortgage payments are not made, the lender will file a foreclosure. There is only on way to stop this from happening and that is pay the mortgage lender. Mortgage loans are just like car loans, if you do not make payments you will lose it. So, this is identical to what will occur if someone fails to pay their mortgage – foreclosure will take their home from them.

A legal action filed by somebody who is unable to pay his debts is called as bankruptcy. While the debtor is going through bankruptcy, this step puts an end to anyone engaged in civil proceedings. Therefore, according to law, the mortgage lender must stop all legal action (including foreclosure). However, a mortgage lender can file for relief from the automatic stay, and when the relief is granted, simply proceed with the aforementioned action. In short, bankruptcy will not allow a debtor to retain a house without paying his debt to the mortgage lender, and it will not halt the foreclosure process. Going into bankruptcy does not solve the problem; it only makes the process proceed more slowly.

While bankruptcy does not stop foreclosure, it can give a person time to pay a mortgage lender or make it easier for a person to pay a mortgage lender. Because bankruptcy forces a mortgage lender to stop the foreclosure proceeding, it gives the debtor additional time to come up with funds to repay the lender. It is the last resort for any debtor to declare bankruptcy when he is totally unable to meet his creditors commitments. Under such circumstances, he may be discharged by some unsecured debts but under mortgage, he shall be prepare to repay the debt within the given time as the debt is secured by tangible assets. Also, a chapter 13 bankruptcy is a court ordered payment plan and allows a debtor to pay the mortgage catch up amount over a period of time.

Unfortunately, not everyone qualifies for bankruptcy and if they do qualify, there are legal fees to pay. The legal fees and other related costs can be more than that required to catch up and pay current mortgage payments. If you think that bankruptcy might help in stopping or avoiding foreclosure, speak with a licensed advocate. Bankruptcy is so detailed that you should not try to handle it by yourself.

The article is composed of generalized info, so if there are any queries of any type in regards to this subject you need to consult with an attorney licensed in your state.

bankruptcy loan

admin — Wed, 29 Jul 2009 18:35:24 +0000

Providing you have enough equity in your home there is absolutely no reason why a person should not get a loan secured on their property a good interest rate. Many people who are bankrupt are able to raise funds with a home equity loan despite their situation and increase the money they have available without being penalized on the interest terms. Some basic requirements will need to be met to have the home equity loan approved but the bankruptcy will not get in the way.

Specially designed to meet the needs and conditions by which a bankrupt has to arrange his financial affairs, these home equity loans for people who are bankrupt are restricted to that group of people only. The loan terms won’t be as advantageous as a regular home equity loan but the requirements for an approval won’t be so harsh either so as to make sure that those with bankruptcies on their credit reports can qualify for them. The equity release is available as a percentage of the remaining equity in the home if the outstanding mortgage were paid of in its entirety although if a secured loan is already part o the equation, this will be deducted as well. Normally this percentage is in the region of 85 percent of the remaining value so if your home has 50,000 dollars of available equity then you can arrange a loan up to 85 percent of this. Even though the home equity loan is being made to someone who is bankrupt, they will receive good terms for the loan because it is secured on the property which also means that a larger amount of money is available. You will also get lower interest rates and costs, more flexible repayment programs and thus, lower monthly payments which are easy to afford.

Since these loans are secured loans, there is not much to worry about qualifications and due to the risk reduction that collateral implies, there are rarely thorough credit verifications to be done. The borrower will only be subject to a single credit check instead of a full version which means there is little likelihood of it being refused. Once the brief credit check has been carried out the only other details to be looked into are the deeds to the property. Of course the borrower will need to provide proof of that the loan can be repaid regularly.

To do this, the borrower will need to provide proof of income and that the monthly payment on the loan is not greater than 40 percent of his (or her) monthly income. If the amount for the monthly repayments is above the forty percent, the amount borrowed may be reduced until it falls within the limits set so financial hardship will not affect the borrower.

bankruptcy foreclosure

admin — Tue, 28 Jul 2009 20:42:58 +0000

Bankruptcy versus Foreclosure

Some people consider whether or not they should file bankruptcy or just let their mortgage lender foreclose on them? However, it is not as simple as a case of either /or and a decision cannot be made this easily. If monthly mortgage payments are not made, the lender will file a foreclosure. Avoid foreclosure by bringing your payments up to date. A mortgage loan can be compared to a car lo9an which if not paid back on time, the car could go for repossession. Therefore the same result will apply to a person does not pay his mortgage payments; he will lose his home through foreclosure.

The definition of bankruptcy is to file legal paperwork to resolve an inability to pay debts. While the debtor is going through bankruptcy, this step puts an end to anyone engaged in civil proceedings. Therefore, legally, a mortgage lender must cease every legal action, foreclosure among them. Even then to get relieve from the automatic stay a mortgage lender can go for legal action and when granted a stay can comfortably proceed with the further action. The truth is bankruptcy does not stop foreclosure nor does it allow you to keep your house with out paying the mortgage lender. Bankruptcy does not eradicate the situation; it merely slows the process down.

Although filing bankruptcy can’t stop foreclosure, it provides an individual with additional time to repay a mortgage lender or facilitates paying the lender of the mortgage. Because bankruptcy forces a mortgage lender to stop the foreclosure proceeding, it gives the debtor additional time to come up with funds to repay the lender. Also, since bankruptcy can discharge some unsecured debts, a debtor may have more money with which to pay his mortgage payments. Additionally, chapter 13 bankruptcy allows a mortgagee to make payments on the mortgage over a court ordered period of time.

Unfortunately, not everyone qualifies for bankruptcy and if they do qualify, there are legal fees to pay. The amount of money you need to get your mortgage payment current may be nothing compared to the legal fees you will have to pay. If you think that bankruptcy might help in stopping or avoiding foreclosure, speak with a licensed advocate. Bankruptcy is complicated enough that you need to hire a lawyer who knows what he or she is doing.

This article contains information of a general nature, therefore if you have further questions on the matter you should discuss them with a licensed legal professional in your own state.