Hi, I'd like to help you with your bankruptcy questions this afternoon.
Hi, have you been served with any papers relating to a foreclosure proceeding filed against you?
How much is the property currently worth, and how much do you owe on the mortgage(s) on the property?
It will typically take three consecutive missed payments before a foreclosure complaint will be filed against you.
And how much do you think you could sell the property for now?
I'm very sorry to hear that.
You could sell the home before it goes into foreclosure.
Alternatively, maybe you could contact the lender and work out a deed in lieu or short sale.
Since this is a new house, I would guess it's more likely that the lender would agree to one of these options, as they can simply resell the house at relatively minimal expense.
You would essentially sign the house back over to the lender and walk away from the property. The lender does have to agree to this, however. They can refuse to let you do this and go through the foreclosure process instead.
Well, there is a credit hit for the deed in lieu or short sale, but it's not as bad as a foreclosure.
Plus, in a foreclosure, you will have a money judgment entered against you, part of which you may have to pay if the sale of the house does not cover the amount of the judgment.
Yes, typically people work with brokers or realtors to find a buyer if they want to do a short sale.
The bank would have to waive any potential deficiency to be a "short sale."
For a deed in lieu, you would speak with the lender.
You could be stuck having to pay the difference, if any. This is the point at which you would start to consider filing for bankruptcy, but I think it's premature to consider bankruptcy at this point before attempting to work something out with the lender.
Are you "underwater" on the property?
Do you owe more than the home is worth if you were to sell it on the market?
Or do you have some equity in the home?
It might be best to wait and see if you can sell the property or work something out with the lender. Maybe you can sell the property for the amount you paid for it, and everything will work out.
The lender does not have to pursue a deficiency judgment against you if there is a deficiency after the foreclosure sale. In fact, they rarely do. But it is a possibility.
That being said, since wage garnishment is not permitted in Texas, it doesn't make much financial sense to sue you for a deficiency judgment unless you have fairly substantial assets.
So in summary, you really don't need to seriously consider bankruptcy due to this scenario until all of the following happens (if it does): 1) Lender files a foreclosure lawsuit, 2) Lender obtains a judgment and sells the property at foreclosure sale for less than the amount you owe on the mortgage, and 3) Lender files a subsequent lawsuit for a deficiency judgment.
If you can any of those things from happening, bankruptcy may not be necessary.
If you can avoid
That's the deed in lieu.
But yes, you should try to explore alternatives to foreclosure, because it will hurt your credit a lot.
Essentially, yes. You can't force the lender to take a deed in lieu, but you should explain the situation (brand-new house, need to move out due to impending divorce, etc.) and see if they're willing to help you.
If the lender doesn't agree to the deed in lieu or short sale, maybe you could at least request additional time to sell the house before they file the foreclosure. Talk to them and see what they're able to offer you.
Nothing. Don't tell them that if it isn't true though, as that was just my assumption for purposes of explanation.
You can tell them you're no longer living together, that's a plausible reason why you can no longer make the mortgage payments.
Right, you would request that the lender allow you to grant them a deed in lieu of foreclosure (or a short sale, if you can find a prospective buyer who isn't willing to pay the full purchase price).
Several months minimum, in all honesty.
Once a foreclosure is filed, the foreclosure may take as little as 60 days.
Yes, that might be a good idea, as you want to avoid foreclosure if you can.
If you can't, you can't, but at least you'll have tried.
Those things could be relevant later, but it makes a lot of sense to try to deal with the house first, if you can.
Thank you, XXXXX XXXXX luck!
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