Hello and thank you for allowing me the opportunity to assist you.
Question: “My question is that now that the bank is threatening forclosure (property worth 950K+, loan bal. is approx. 850K)within the next month or so, and that "...in the event the Property is sold at foreclosure and a deficiency remains...Lender may choose to file suit to collect the deficiency, cort costs, and attorneys' fees..." should I declare the corporation and/or myself bankrupt?”
Answer: I would wait until you are served with the lawsuit before filing. Based on the figures you provided there may not be a deficiency (though sales at auctions always bring less than market value). And even if there is a deficiency, it’s possible the lender will not bother suing if it believes that you have no realistic chance of repaying, and bankruptcy is apparent. It would ultimately be a waste of attorney’s fees.
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DISCLAIMER: Please understand that the complexities of most legal problems cannot be adequately addressed in this setting, and that I am only licensed to practice law in the state of Maryland. Accordingly, you acknowledge (1) that we have not formed an attorney-client relationship, and (2) that my post is general information only and not specific legal advice.