With literally millions of adjustable home loans ratcheting up to a higher interest rate, resulting in much higher monthly payments, many homeowners have fallen behind on their mortgage payments. If you are facing the threat of foreclosure, you might be wondering about the impact of foreclosure vs bankruptcy upon your life.
Before you start comparing the details of foreclosure vs bankruptcy you first should make a decision as to whether or not you want to keep your home. Are you and your family emotionally attached to this particular home, and this specific neighborhood? Perhaps you'd be happier in another location. Do you owe a lot more on the house than it is worth? These are all things worthy of some serious thought.
Business Bankruptcy Lawyer, Declare Bankruptcy, Bankruptcy Attorney San Antonio,
Foreclosure and bankruptcy will both show up in the public record portion of your credit report. Each of these will have a major impact on your credit. You must carefully consider the effects upon your overall financial health.
If you've decided that you want to keep your home, filing Chapter 13 bankruptcy probably makes sense, especially if your lender has not been cooperative in modifying your loan terms to something you can handle. Bankruptcy would help you to pay off that portion of the mortgage which is in arrears. Another advantage is that the bankruptcy court will typically order your creditors to stop any legal actions they are pursuing, including foreclosure. So filing for bankruptcy can definitely buy you some time.
The timeline for Chapter 13 debt payoff is quite short, typically 3 to 5 years. You'll probably have to attend credit counseling sessions before filing bankruptcy. There is also a means test to determine your eligibility for chapter 13. But, you'll avoid the many negative consequences of foreclosure.
Foreclosure vs bankruptcy: Which One Impacts Your Credit Longer?
Bankruptcy is considered by many consumers to be their last resort. It remains on your credit report for 10 years, compared with 7 years for a foreclosure. However, once you file for bankruptcy, your creditors can no longer report your debt as delinquent, so your credit report just takes the one hit. And, you can rebuild credit in as little as 2 years.
With a foreclosure, you'll suffer a "double hit" to your credit score; one hit on the trade line and another for the legal entry. With a foreclosure on your record, you will probably find it very difficult to get a mortgage loan for most of the 7 years that it shows. A foreclosure is the worst of all indicators of risk to a lender, when evaluating you as a potential borrower for a home loan.
Bankruptcy can cost several thousand dollars when handled by a competent lawyer. Some self-help books are available that can assist you in filing for bankruptcy without a lawyer, but beware that mistakes can cost you more than the attorney fees. Clearly, the do-it-yourself approach to filing bankruptcy is not for everyone.
The bottom line is, although bankruptcy can settle most of your debts, and has some clear advantages over foreclosure, each individual's situation is different. While every effort has been made here to honestly compare foreclosure vs bankruptcy, there is no substitute for competent legal advice.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
Rating of Corporate Bankruptcy
Get Online Application at online Bankruptcy Lawyer.
0 comments:
Post a Comment