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    qork's Avatar
    qork Posts: 1, Reputation: 1
    New Member

    Jun 7, 2008, 11:49 AM
    Facing foreclosure
    If facing foreclosure and the house has no equity which is the better option, bankruptcy or foreclosure?
    david5733's Avatar
    david5733 Posts: 5, Reputation: 1
    New Member

    Jun 7, 2008, 12:27 PM
    The first thing I would do is try and work with your lender. Chances are your banker is foreclosing on several homes. They have to prioritize and will most definitely foreclose on the homes that do have equity. They can sell those homes below market value, get a quick sell and recoup their money.

    Now on a home with no equity or a home that is maxed out to the hilt, they might foreclose on those homes as well, but it MAY be in their best interest to work with you.

    Don't ignore their letter or put your head in the sand. Call them and explain you want to fulfill your obligation, but circumstances in your life right now are making it too difficult. They may look at your situation and work with you.

    Now the bank may not want to work with you and/or if the burden of the monthly payments is just too much for you, I would suggest getting a free consultation from a lawyer as to what is the best approach for you problem.
    progunr's Avatar
    progunr Posts: 1,971, Reputation: 288
    Ultra Member

    Jun 7, 2008, 12:54 PM
    Neither one is a good option, but there are things to consider.

    Would filing Bankruptcy, put you in the situation to be able to afford the mortgage payment?

    If the answer to that is yes, then I would go that route, and keep my home.

    The deal is, if you let them foreclose, you are going to have a large unpaid balance due on the mortgage, and they are going to come after you for that balance.

    So, letting the house go back, and then getting hit with a large law suit for the unpaid balance would probably put you in the position to file Bankruptcy anyway, and not have a home, so, Bankruptcy without losing the home looks pretty good from my point of view.

    If the Bankruptcy would include letting the home go back, then you still loose the home, but the unpaid balance will be included in the Bankruptcy.

    You really should talk to an attorney, most will consult the first time at no charge.
    Loan_Guy's Avatar
    Loan_Guy Posts: 83, Reputation: 6
    Junior Member

    Jun 7, 2008, 01:22 PM
    I agree with the above answer that neither one is a good option.

    Is it a financial hardship that is causing problems making the payments?

    Have you tried to sell it? If so, is it currently on the market and listed on the MLS?

    If so, you may be able to do a short sale and keep your credit intact to move into a more affordable home. You need to talk to a good RE agent if you think that is an option.


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