Bankruptcy

Navigating Financial Challenges in Property Matters

The best way to temporarily stop a foreclosure (up to) the day before an auction (and when a homeowner has unsustainable debt beyond the home mortgage) may be to declare bankruptcy. Bankruptcy is another common strategy to avoid foreclosure (temporarily). A home cannot be sold or foreclosed on (auctioned) while in bankruptcy (Ch 7 & 13).

Sometimes when a homeowner is behind on loan payments and is facing foreclosure, they will declare bankruptcy. When this happens, the lender will file a motion with the bankruptcy court to have the bankruptcy stay on the home lifted (because the owner is not paying the loan). At this point the stay is lifted and the home goes back into foreclosure and to auction. Thus, bankruptcy can be an effective, although only temporary delay of a foreclosure.

Advantages and Disadvantages

The advantage of declaring bankruptcy is that it can be done at the last minute just before the home is actually auctioned off by the lender. Once the bankruptcy is declared, the auction is stopped or nullified until the lender stay lifted.

The disadvantage of declaring bankruptcy is that the vast majority of homeowners that declare bankruptcy to stop a foreclosure end up getting a bankruptcy AND a foreclosure on their credit. This is because a bankruptcy only DELAYS the foreclosure, and does not prevent it. Also, fees and missed payments pile up during bankruptcy making foreclosure more likely and less preventable.

If a homeowner’s financial problems can be mostly resolved by selling their home, a short sale or other options for the seller are much better than a bankruptcy

Unfortunately – a bankruptcy attorney will rarely tell clients this! Most homeowners that consult only a bankruptcy attorney when looking for solutions to avoid foreclosure will end up concluding they have only one option – declaring bankruptcy and getting a foreclosure even though both might have been avoided.

Bankruptcy is a big decision. Before (or in conjunction with) exploring this option, make sure you talk to a creative real estate investing professional about all of your options! Regardless of your situation, income, or equity, if you would like to discuss all of your options for selling your home quickly to avoid foreclosure, please contact us.

Advantages and Disadvantages

The advantage of declaring bankruptcy is that it can be done at the last minute just before the home is actually auctioned off by the lender. Once the bankruptcy is declared, the auction is stopped or nullified until the lender stay lifted.

The disadvantage of declaring bankruptcy is that the vast majority of homeowners that declare bankruptcy to stop a foreclosure end up getting a bankruptcy AND a foreclosure on their credit. This is because a bankruptcy only DELAYS the foreclosure, and does not prevent it. Also, fees and missed payments pile up during bankruptcy making foreclosure more likely and less preventable.

If a homeowner’s financial problems can be mostly resolved by selling their home, a short sale or other options for the seller are much better than a bankruptcy

Unfortunately – a bankruptcy attorney will rarely tell clients this! Most homeowners that consult only a bankruptcy attorney when looking for solutions to avoid foreclosure will end up concluding they have only one option – declaring bankruptcy and getting a foreclosure even though both might have been avoided.

Bankruptcy is a big decision. Before (or in conjunction with) exploring this option, make sure you talk to a creative real estate investing professional about all of your options! Regardless of your situation, income, or equity, if you would like to discuss all of your options for selling your home quickly to avoid foreclosure, please contact us.

Common Questions about Bankruptcy

How and How Much?

Generally you consult with a Bankruptcy attorney and complete the paperwork and they file it with the courts. Attorneys charge different fees for this. We have seen this cost around $2000 for most people (for a fairly simple bankruptcy). Complex bankruptcies will cost more. This is a specialized area of law.

Does a Bankruptcy Stop Foreclosure?

Yes, but only temporarily. Bankruptcy delays a foreclosure until the lender files a motion to have the bankruptcy stay lifted. This almost always happens. During this delay, fees and missed payments pile up making foreclosure more likely and less preventable.

Are there alternatives?

Yes. Contact us and we can discuss other options that might be more suitable with less damage to your life and credit.

Our process

We recognize the difficulties you're going through, and we're here to offer the support you need. Let's talk about your current situation and explore the best solution for you and your family. Our team is ready with the funds to buy your home in its current condition, ensuring a quick closing that meets your needs. Let us be your trusted partner in delivering a customized solution that suits you perfectly. Contact us today, and let's work together to make your goals a reality!

STEP 1

Gather Information

We speak and meet with you to learn about current property circumstances.

STEP 2

Determine Value

We will do some very quick inspections to estimate property value and needed repairs on our end.

STEP 3

Find Solutions

No two properties are alike and the solution has to meet your needs. Let's talk!

STEP 4

Fast Closing

Once you are ready to move forward so are we! We will then get you paid as fast as possible! Easy as that!