Bankrupt vs. Foreclosure?

Question by hart277: Bankrupt vs. Foreclosure?
Does anyone know if its better to go bankrupt then to foreclosure on a property? If they’re taking the property back wouldn’t it show up as a bankruptcy anyway?
I can’t modify through the banks, because I haven’t missed any payments. We’ve had to move out of the property because of mold and mildew concerns. So we have a mortgage and rental payments and work isn’t going as good as it was last year so you take all that into aspect and I can see myself having a hard time to pay for all this stuff and trying to find out what options are available to me.

Best answer:

Answer by golferwhoworks
no it is better to bk7 and foreclose inside the chapter 7.
That way you do not get a balance owed if it sells for less than owed. A foreclosure will show up either way on your credit and you will not be able to purchase with a bank loan for not less than 4 years any way.
I am a mortgage banker in Tn &KY

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Comments

  1. S P says:

    Absolutely correct on both of the last posts. If you let the home go to foreclosure, they sell the house, you’re responsible for the deficiency balance, and bankruptcy is the only way out of that. So…first I’d try to sell it first, if you can’t sell it, see a local bankruptcy attorney and based on your income, assets, list of debt and last 4 years of taxes, they can tell you what you can qualify for. But, bankruptcy should be the absolute last resort, it stays on your credit report 10 years, and the debts for 7….Good Luck!

  2. elizabeth s says:

    Do niether Bankruptcy or foreclosure why not Modify? It will lower your rate and monthly payments without refinance.
    Company: American Modification Agency

    516-506-4703

  3. emcpower says:

    If the choice is one or the other, then if you declare bankruptcy, in 30 days they will have the bankruptcy Judge approve a foreclosure. Bankruptcy does not stop a foreclosure, it only delays it for 30 days. Under new Fannie Mae guidelines, if you do a short sale, you can not get a FHA backed mortgage for 2 years; if you go to foreclosure, you can not get a FHA backed mortgage for 5 years; if you declare Bankruptcy, you can not get a FHA backed mortgage for 7 years. These have always been conditions, but the time periods have changed. Currently, and for a while, there are no other loan backers besides FHA.

    If, however, you have to do both, then do EXACTLY WHAT YOUR BANKRUTCY LAWYER SAYS!