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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2815
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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1)Since the foreclosure process could take quite some time

Resolved Question:

1)Since the foreclosure process could take quite some time should we wait for awhile to declare bankruptcy? We do not have any assets to speak of as we still owe on our cars and have no investments?

2) Can our wages be garnished at some point if we are liable for the difference between what our house forecloses and then someday sells for less than the amount owed on the loan and we do not declare bankruptcy?

3) If we have no assets should we even think about declaring bankruptcy?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 6 years ago.
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Terry L. :

Hi and thank you for your question. In the future, you can request me to answer any further questions.

Terry L. :

There is no reason to wait to file.

Terry L. :

Bankruptcy discharges the debt, the foreclosure transfers title back to the lender.

Terry L. :

What ever the balance is, will be totally discharged if you are walking away from the property, and the foreclosure status has no impact on what or how much would be discharged, it all will be cleared for the mortgage company.

Terry L. :

The lender will need to bring a motion to continue the foreclosure process while your bankruptcy is pending, but that's it, you won't have to go to that hearing.

Terry L. :

It could be possible if a deficiency balance is awarded before bankruptcy, the lender can take whatever state collection action is allowed. That stops once you file bankruptcy, so you should file sooner to be safe. If you have no assets, chapter 7 will be the best option, nothing will be liquidated to pay the creditors with, and your debts would be discharged. Most clients are able to get back on track instantly after their cases, which last about 90 days only. Talk to a local bankruptcy attorney to review your options, and they can set you up to file at the most appropriate time.

Terry L. :

Thanks for your question, good luck to you.

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