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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17248
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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I just received a notice of sale form the sheriff. It seems

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I just received a notice of sale form the sheriff. It seems my home owners association has initiated judicial foreclosure. I was hoping to sell the condo before I was foreclosed in order to protect my credit rating but Im not really sure how all this works. Its my understanding that when I received my mortgage I signed 2 documents, a promissory note and a a security agreement which can be recorded as a lien to enforce the promissory note. I also understand that chapter 7 will discharge the debt(promissory note) but not the liens. Heres my question:

My credit rating took a hit from bankruptcy but it did discharge my debt. Now that I have been foreclosed on will my credit take another hit even though the debt from the mortgage has been discharged?

If so is there anything I can do to remedy this?

I spoke to my real estate agent and he is confident that once we list my home I will get multiple offers in a matter of weeks. This means that I may be able to submit a signed purchase agreement to my bank for approval before the June 14th auction. Will this prevent the foreclosure and save my credit score?

Thanks

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on

WALLSTREETESQ :

Since you discharged the debt in bankruptcy,

WALLSTREETESQ :

and your credit took a hit the foreclosure should not hurt you, but it would be listed on your credit report,

WALLSTREETESQ :

In order to remove any foreclosure on your credit,

WALLSTREETESQ :

you can contact the other party and advise them you will sign over the deed so they do not have to foreclose on the property,

WALLSTREETESQ :

Another option may be to file a 100% chapter 13 bankruptcy to stop the sale until you can sell it,

WALLSTREETESQ :

A chapter 13 if a 100% plan can give you time to sell, even if you do not go through with it.

WALLSTREETESQ :

If you have any further questions please do not hesitate to ask.

WALLSTREETESQ :

If satisfied please provide us with positive feedback.

Customer:

But my question was whether or not my credit will take another hit because of the foreclosure even though I filed for bankruptcy? The debt from the judgement was discharged thorough my bankrupcy so they only have a lien now. If thats the case then why would my credit take another hit?

WALLSTREETESQ :

The foreclosure, would be listed on your credit report,

WALLSTREETESQ :

that would be different than the bankruptcy,

WALLSTREETESQ :

the hit would be limited as the bankruptcy already lowered your score,

WALLSTREETESQ :

Anytime a foreclosure is brought it is reported to the credit bureaus,

WALLSTREETESQ :

Since the deed is still in your name,

Customer:

I see, so my credit score will be lowered but not as much because I already have the bankruptcy? any idea how much lower? I read somewhere that a foreclosure alone will lower my score by 250 points and I was concerned that would be an additional 250.

WALLSTREETESQ :

a foreclosure proceeding is the only way to remove your name, and have the property go to the debtor

WALLSTREETESQ :

If you started with a 800, 250 would be normal,

WALLSTREETESQ :

If after the bankruptcy you were at 600 or lower, the foreclosure would lower it 25-50 points if at all,

WALLSTREETESQ :

but it is removed after 7 years,.

WALLSTREETESQ :

If your score now is in the 500's the score would not be lowered.

WALLSTREETESQ :

The point loss also depends on the borrower's starting point: People with very high credit scores have more to lose than low-score borrowers; the impact of a single blemish on an 800 score is more than on a 500.

WALLSTREETESQ :

Typically the foreclosure would not lower your score much if you just received your bankruptcy discharge,

Customer:

oh i see, my bankruptcy was just discharged and my score is now around 570. Are you saying that the foreclosure will not effect my score? basically i will be in the same situation either way as far as my efforts to get my credit rating back up? that would be a huge relief

WALLSTREETESQ :

Yes, if anything it may go down 10-20 points, but will go up soon after as you now have no more debts or judgments

WALLSTREETESQ :

If you have any further questions please do not hesitate to ask.

WALLSTREETESQ :

If satisfied with our service please provide us with positive feedback,

Customer:

ok great, thats what i needed to know. As I mentioned the only reason I wanted to sell my home before foreclosure was to protect my credit but if it is only lowers my score by 20 points then I may be better of letting my condo sell at auction then take advantage of my redemption clause and stay here for 12 months free.

WALLSTREETESQ :

That is fine,

Customer:

thanks so much

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