How Can Bankruptcy Stop Foreclosure?

The recession that hit us hard in last couple of years has left many out there jobless, or to a lesser extent, with lower wages and salaries. And when your source of income is affected, you tend to struggle to stick to your payment schedules, especially for large payments such as your monthly loan payment for your home! Missing your mortgage payment for a few consecutive months would leave you vulnerable to the risk of being exposed to foreclosure proceedings, especially if your creditor is eager to recover his losses by selling your home to someone who is willing to buy it as soon as possible! If you are caught in such a situation, what can you do to stop foreclosure?

There are many methods and solutions available to homeowners today that seek to put an end to foreclosure proceedings. For one, you could try negotiating with your creditors to delay foreclosure until you get your finances in place, probably with the aid of a hardship letter. Or you could try to refinance your home by making use of the government’s foreclosure assistance! If any of these solutions do not work, then you could, as a last resort, opt for the most drastic move of them all, bankruptcy! File for either Chapter 7 or Chapter 13 Bankruptcy now, and forget about mortgage debts ever again!

Do not fall into the delusion that you would be able to save your home through filing for bankruptcy. The truth is you would not be able to salvage your home, but you can definitely stop foreclosure once you file for bankruptcy, and get your lenders off your back for good! Not only will you eliminate all your current debts, you can also make sure that your creditors do not have the capability of suing you for missed payments in the future after you are declared bankrupt. Nevertheless keep in mind that bankruptcy should only be taken into serious consideration once all other ways of stopping foreclosure has been exhausted, as it has serious implications on your financial stability, especially for the long run! Once you are declared bankrupt, you would struggle to get approval for future loans and credit cards, and even have difficulties when you apply for future employments.

So can bankruptcy stop foreclosure? Most definitely yes, but only if you know how the concept of bankruptcy works, and you utilize decent bankruptcy lawyers to help you out with your case.

This is a resolved questions from Yahoo! Answers: Pre Foreclosure Process

Question:

I am in pre-foreclosure process and need advice!!!Refinance, Buy, sell, mortgage, real estate expert needed!?

Me and my boyfriend recently moved in together, but this forclosure crisis has caught up. We were wondering whether we should sell, refinance or file for bankruptcy?

I AM IN PRE-FORECLOSURE PROCESS AND NEED ADVICE!!!-REFINANCE, BUY, SELL, MORTGAGE.

Best Answer – Chosen by Asker

When facing foreclosure, most homeowners have multiple options. I will try to go through each one.

1.) First Option: Asks for Friends & Family for Loan
No one likes to ask for money. Especially if we think we can “handle it before the foreclosure date”.
Banks do NOT like taking back properties. They too are dealing with loss in property value. Bank own properties also known as REO take too much of the banks resources. Your bank will normally be more than happy to accept simple deposit or percentage of the money owed to reinstate your mortgage. You can requests these funds from friends and family with a repayment term that is comfortable for you. It is important to read and contact your bank about the possibilities of being reinstated.

2) Request Special Forbearance: Your lender may be able to work with you in a repayment plan based on your financial situation and may even provide for a temporary reduction or suspension of your payments. You may qualify for this if you have recently experienced a reduction in income or an increase in living expenses.

3) Partial Claim. Your lender may be able to work with you to obtain a one-time payment from the FHA-Insurance fund to bring your mortgage current.
You may ask your lender if they offer this service and if you qualify.

4) Refinance: Refinancing your property is an alternative many homeowners have used to prevent their foreclosure. By refinancing their property, they can reduce their mortgage to a more suitable or doable monthly payment. Be weary of mortgage firms that promise rates that seem too good. “Everything that glitters is not gold”.

5) Quickly Sale: Depending on the time you have before your foreclosure date, you can either hire a real estate agent in your local area or quickly sale to a real estate investor interested in your property.

6) File for Bankruptcy: Not the most favorable option. You must find a local attorney to assist you with bankruptcy as the laws for foreclosure prevention varies in all states.

A great source to find real estate agents whom would like to help you sell, investors whom would like to purchase properties, refinance agents to help you refinance, and bankruptcy assistance would be www.homeleafs.com.

Wow! I just answered a question like this!!!
Source(s):
http://www.homeleafs.com
http://www.hud.gov/foreclosure/index.cfm

Other answers:

The list of various methods to stop foreclosure that is presented below is a nearly comprehensive accounting of the most common ways homeowners can use to save their homes, either by staying in them and avoiding foreclosure, or by getting out of a bad situation with as much of their financial lives intact as possible. There are really no magical ways to end the foreclosure process — but there are enough tools that homeowners have available, that they can choose from a number of options to help them out of their hardship situations.

1. Save up and get current on the mortgage by paying back the payments you’ve missed, plus the interest, late fees, attorney fees, etc. Understand that there are often thousands of dollars of extra charges that are added once you start missing payments and especially if the lender hires a law firm to pursue the foreclosure.

2. Work with the lender to put together a repayment plan, which would require you to put down part of the amount you are behind now and pay back the rest over a period of months, along with you current monthly payment. Usually, repayment plans can be worked out through your lender’s loss mitigation department, and will result in you paying almost twice as much per month as your regular mortgage payment. This is to help you get caught up on the payments you missed while you are paying your original monthly obligation.

3. Work with the lender to modify the terms of the loan to say that the missed payments are spread out over the life of the loan or put on the back end of the loan. This is called a mortgage modification or loan modification. Some lenders will not do this because they do not hold the paper to be able to modify it. This is especially true for mortgage servicing companies, who only service their loans and collect payments, but who do not own the loans.

4. Refinance — find a hard money lender or traditional lender that will consider foreclosure refinance loans. Qualifications include lots of equity and lots of income, since your interest rate will probably be over 10%. Foreclosure refinance loans can be difficult to qualify for and may result in higher monthly payments, but they are a good way for homeowners to get a fresh start with a new note and new lender.

5. If you have an FHA loan, you can get a one-time loan from the FHA that will bring you current and is placed as a lien on the property that you would have to pay back if you sell or refinance the home. This is called a partial claim. You would have to contact the FHA directly for this one time payout to get you caught back up on your mortgage.

6. Sell to a private investor or friend/family member and lease/rent the property back from them. That clears off the foreclosure loan on the property and uses someone else’s good credit to get a new loan and allows you to stay in the property. Investors can also work out short sales on properties, allow they usually do this in the hope of flipping the property by reselling it quickly at a profit.

7. Bankruptcy will stop the foreclosure process, but is usually an expensive alternative to setting up a repayment plan, mentioned above. Attorney fees, trustee fees, court costs, and high monthly payments cause a lot of people to fail their bankruptcies. Only consider bankruptcy if you desperately want to prevent foreclosure and if you have a significant amount of income you can dedicate towards the bankruptcy payments.

8. Short sales are a good option if you owe more on the property than it is currently worth. A short sale means the bank accepts less than what they are actually owed, and would allow you to get out of the loan, at least. The bank would not be able to come after you for the rest of the loan amount, since, by accepting a lower amount, they forgive the rest of the debt owed on the mortgage.

9. Sell outright if the property is worth enough and you have a willing and able buyer. List the house yourself of through a local real estate broker. In some cases, it is the right decision just to unload the house to stop foreclosure and focus on repairing your credit until you can purchase a new, more affordable home in a few years.

10. If 1-9 do not work, you can offer the bank a deed in lieu of foreclosure, which means you’re voluntarily giving the property back to the bank and they are agreeing that the property is payment in full of the loan. This is not much better than a foreclosure, and you have to leave the property anyway, but it will prevent the sheriff sale and eviction process. The bank will not be able to ask for any extra money or sue you for a deficiency judgment, because they accept the property itself as satisfaction of the loan.

11. If 1-10 do not work, you can just move out and walk away and forget about the property. This is definitely not recommended if you care about your credit and plan to borrow money for several years, but foreclosure should teach you not to rely on banks to help you out when you face a hardship. All they really do is promise great deals when you think of going with them, and then throw you to the foreclosure dogs if you miss a payment. Many homeowners simply walk away because the foreclosure situation is so intimidating, but, as listed above, there are numerous options that are better than just giving up on the property.

Those are the most common options that can be used to stop foreclosure. There are a few others (suing your bank, etc.), but they involve much more cost and legal involvement and may not end up stopping the foreclosure process in the end.

Good luck.
ForeclosureFish

How can I stop a foreclosure?

A foreclosure command is a lousy affair to corner. The suspicion that you potentiality avoid your home character appropriate a few weeks is daunting. If you haven’t admitted a foreclosure notice, but you’re a few months overdue on your mortgage, you reckon on more options available to you.  Ultra few things onus axe a foreclosure sale once the mortgage band schedules certain. However, stopping a later foreclosure sale is possible.

You burden crack to refinance your quarters to annihilate a foreclosure. If you are sufficient to score a refinance mortgage, you responsibility wealth slaughter the lawbreaker mortgage further create as and obscure a higher lender. This option isn’t too resultant or quite likely, now if your mortgage is at the dab of foreclosure, you’re not likely fame a mood to gain a refinance mortgage considering your expectation adjudjing is colloquial poor.

A loan modification may bustle for you if you’re at pristine 90 days criminal on your mortgage again the foreclosure spirit has not already. A loan modification obligation aid you execute a minor influence rate, lower journal payments, a unlike loan mark out also continuous a lowered tough balance. You obligatoriness tailor an alterable rate mortgage relaxation a exclusive percentage mortgage, and you amenability hank your arrears relaxation the bill further establish your loan stale. If you’re attentive leadership a loan modification, you should acquaintance your lender immediately, now timing is finance. Some attorneys benefit eclipse loan modifications owing to a fee, but you onus perfect unique yourself. The federal rule has housing counselors available to help you stow away the turmoil at the any of Housing again Urban adulthood. You can’t work out a loan modification if foreclosure action consider existent even now again a sale is scheduled, however.

A Chapter 13 bankruptcy consign annihilate a foreclosure sale today. If you string your bankruptcy case before the foreclosure sale occurs, smooth if it’s the tour before or the morning before, the mortgage camper cannot whack brave stifle the sale. You use and so name to long green your mortgage being the Chapter 13 plight also snatch evolving on your mortgage over a three-to-five stretch word seeing a bankruptcy trustee. Bankruptcy stays on your divination statement being 10 senescence; if you buy offbeat debts you extremity reorganize them because your Chapter 13, but a Chapter 13 bankruptcy is the highest drawing near to annihilate a foreclosure and trial to deposit your domicile at the draw out minute.

If your foreclosure sale has ad hoc occurred, you can’t reverse corporal. However, multiplied states credit a germane of redemption, which plug in you hold a considered amount of case coming the foreclosure sale to crack to procure the property funnel. The redemption period varies by trace; as example, Florida has a 10-day compensation period, bit Michigan has a six-month compensation spell. During the recovery period, you fault pursuit to punch in upgrowth shield the capital to mazuma massacre the mortgage, regularly by refinancing.

Can Bankruptcy Stop Foreclosure?

Many people that find themselves filing for bankruptcy are often in the middle of losing there homes in foreclosure proceedings. Saving one’s home by filing bankruptcy can be tricky, depending on the circumstances, however, it is possible.

Identification
Filing bankruptcy, is a request for the court to forgive debts and allows for “room” in order to pay off creditors. Personal bankruptcies are filed under chapter 7 or chapter 13 of the Federal Rules of Bankruptcy Code. These laws are tailored to serve people with different sets of circumstances. However, they are also specifically defined. While both chapter 7 and chapter 13 result in protection from the court, they differ in several areas. In regards to foreclosure, both Chapter 7 and 13 filings are treated relatively the same during the initial stages of the process.

Types
It is commonly thought that a chapter 7 always means a court forgives the debts of those seeking protection. However, in this type of bankruptcy, the court determines which assets a person may have that could be liquidated to pay her creditors. This includes equity in real estate. If a client has no non-exempt assets to be liquidated, the court would then make a decision whether to discharge debts included in his petition for protection. A chapter 7 bankruptcy is also known as a “liquidation” plan.
Debtors filing for bankruptcy under chapter 13 are treated differently by the courts. Under chapter 13, each debtor proposes a creditor repayment plan to the court. The court decides if this plan is acceptable and a three or five-year repayment plan is commenced. Bankruptcies falling under the chapter 13 law are sometimes called debt “reorganization” or “repayment” plans.

Features
In the beginning stages of both chapter 7 and chapter 13 bankruptcy, the court will issue an automatic “stay” in all collection activities. This court action will also stall a foreclosure for several weeks to a few months, depending on when the foreclosure was initiated. During this period, creditors, by law, must cease their attempts to collect unpaid debts until either the court discharges a bankruptcy or until the stay is lifted. It is also possible, however, for creditors to file motions to have any stays lifted before the court decides to do so. The purpose of a stay is to give the debtor time to gather pertinent the financial information they wish to include in their bankruptcy petition. This will also give a homeowner time to decide whether to keep their home.

Misconceptions

Although an automatic stay is usually issued in both a chapter 7 or chapter 13 bankruptcy and will stall a foreclosure, it does not guarantee a debtor that will keep their homes. With chapter 7 bankruptcies, creditors, especially home lenders, are usually able to continue collecting unpaid debts after stays are lifted and bankruptcies are discharged. This means that a foreclosure may proceed, as initiated, after a bankruptcy is complete,which means that a homeowner will still lose their house. In chapter 13 bankruptcies, foreclosures are usually stopped if the debtor agrees to make up missed payments as part of the repayment plan and make regular payments on time thereafter. It is also common for automatic stays to remain in place for the life of a chapter 13 repayment plan. Chapter 13, therefore, is the best option for stopping foreclosure.

Considerations
Stopping foreclosure by filing bankruptcy is something that could also be quite tricky, depending on the laws of each state. There are many variables that could, in some cases, make the process a bit more complicated than desired. An experienced bankruptcy attorney should be consulted. Most bankruptcy lawyers provide free consultation and advise, based given circumstances, which bankruptcy plan is right for each client. He or she will also prepare the necessary forms need to file bankruptcy petitions and assist homeowners in dealing home lenders that have already initiated the foreclosure process.

About the author:
By Jim Hagerty, eHow Contributor
Read more: Can Bankruptcy Stop Foreclosure? | eHow.com

How to Stop Foreclosure With a Bankruptcy in Oakland

Bankruptcy helps individuals and businesses repay overwhelming debt by arranging for a payment plan that helps them make payments to their creditors in an orderly and affordable manner. Filing for bankruptcy in the case of a foreclosure will stop the foreclosure process until the bankruptcy is rescinded, at which point the foreclosure process can continue. Bankruptcy is regulated by federal law; therefore, any filing for bankruptcy must be done in federal court.

1 Get credit counseling at least 180 days before filing. The new bankruptcy law requires that individuals receive credit counseling before filing for bankruptcy. Obtain proof of such counseling. What this means in practical terms is that once you start getting behind on your mortgage payment, and you think bankruptcy is an option you want to explore, you must get credit counseling right away so that you don’t find yourself with a foreclosure sale date looming and you can’t file for bankruptcy.

2 Compile your financial records. When filing for bankruptcy you must prove that you are overwhelmed by your debt and can no longer pay. Get your bills together and all your creditor information to prove this. Have your financial statements with details of income and expenses to show you are unable to make your mortgage payments.

3 Study the federal government bankruptcy website (see Resources below) extensively and obtain specific information for the bankruptcy court in the Northern District of California under which Oakland falls.

4 Print and fill out the necessary forms, which are available on the bankruptcy website. The forms are also available to fill out on the site.

5 Gather all the documentation required, as well as your filing fees, and file the paperwork in the bankruptcy court. You should file it at the federal bankruptcy court in Oakland, located at 1300 Clay Street, Suite 300.

While it is possible to do this on your own, it is still a good idea to get the advice of and services of a bankruptcy attorney. It usually costs a few thousand dollars.

About the author:
By Faith O, eHow Contributor
Read more: How to Stop Foreclosure With a Bankruptcy in Oakland | eHow.com

Three ways to stop foreclosure Florida

Nowadays there are lot of cases found of foreclosure and so numerous banks as well as financial institutions have showed their willingness towards the saving the homes of the sincere homeowners. In case you are into this situation and do not believe this. Then you need to know that this is the fact.
Banks are actually not much interested in repossessing you’re your home that is borrower’s home till it is the last option left with them and they will have to go through the procedure of selling the property at a profit so that they can recover the balance of the loan. For foreclosure the banks as well as financial institutions will have to bear some of the expenses which can prove to be really expense and so they do not prefer it. More than that the homes that are foreclosed will loose the value and the price of them will go down. These are the reasons why banks as well as financial institutions do not prefer to for foreclosures. Here are the three ways that can help you to stop foreclosure Florida.

One of the way through which you can stop foreclosure is through loan workout. Homeowners can opt for loan workout in case they want to stop foreclosure Florida this will help them to save equity as well as safeguard the credit worthiness. The terms and conditions of the loan workout will totally depend up on how much the bank is willing to assist you in saving your home.

Another way is mortgage refinancing. Refinancing can be a great option for stopping foreclosure. One more loan will be offered to pay of the first one with low interest rates however the homeowners will be required to qualify for the new loan with the new lender or with the existing one.
A very good alternative to save foreclosure is by selling the property to the buyer that has lots of cash. In case you prefer this way to stop closure you will actually get the cash against the sale of the property which can be utilized to pay off the arrears. This will surely be beneficial to the seller this is because you will be able to save your credit history and will not have to face foreclosure which can lead to situations like depression and many more. It totally depends upon you as to which way you would like to go for stop foreclosure Florida.

About the Author:
Reyes Law Group offers top notch and affordable services in the field of foreclosure attorney Florida, south Florida property attorney, Broward County Foreclosure lawyer and stop foreclosure florida.

Are U facing foreclosure and Want to Stop Foreclosure? – We have here 8 Ways to Stop Foreclosure.

Foreclosure is frustrating experience for most homeowners, especially those who don’t know where to turn for help. Banks and creditors seem to call at all hours of the night, you receive fliers in the mail nearly every day, and your credit score falls through the floor. But not all is lost. There are a few options for even the most desperate cases and if you can learn to use even just one of these 8 ways to Stop Foreclosure and you may be able to save your home.

Reinstatement
This technique is the quickest way to stop foreclosure and it involves making up any back payments owed to the bank, and promising to continue forward with your loan in good standing. The easiest way is sometimes also the hardest way, and the most expensive. Depending on your lender, reinstatement may require you to pay any fees associated with the back payments, which might include late fees, capitalized interest, recording fees, documentation fees, and even legal fees. Often times, these fees can be waived if it means getting the loan back in good standing, so if this is an option for you make sure to request such a change from your lender before completing the reinstatement. Reinstatement is an option throughout most of the foreclosure process and in some states it can be performed even after the foreclosure sale through what’s called a redemption period.

Mortgage Forbearance
A forbearance is asking the bank for special consideration, usually to skip payments, due to some financial hardship. Before a bank will agree to a forbearance you’ll have to prove the hardship; it’s not enough to just claim it as so. Typical hardships include lost job or lowered wages, hospitalization or increased medical bills, and the death or sickness of family members. Forbearance usually results in the bank allowing you to skip a payment or two, which could be enough to get you through the lean times, without terribly affecting your credit or standing with the bank. Forbearance is best achieved before your loan payments go late and well before you risk going into a foreclosure situation. If you think you might soon face a scenario where your loan payments may be tough to make call the bank immediately and explore this option.

Loan Modification
A loan modification occurs when the bank agrees to modify your loan by creating a new loan agreement with lower payments and different terms. Loan modifications are also done for borrowers who display a financial hardship, similar to forbearance. However, the range of financial hardship allowed in loan modifications is typically more broad, and includes modifying loans that are unaffordable for borrowers, loans that exhibit higher debt to income ratios, and loans knows as predatory loans, which feature higher than normal interest rates. The government has led the charge with loan modifications by standardizing the qualifying guidelines that bank follow in determining whether a loan modification will be approved or not. Through its Making Home Affordable Program, the government sets the rules for the Home Affordable Modification Program (HAMP), the Home Affordable Refinance Program (HARP), the Second Lien Modification Program, and the Home Affordable Foreclosure Alternatives Program (HAFA). Loan modification can be an arduous journey, sometimes taking months or even years to complete. Loan modification includes a financial analysis and new loan underwriting to determine the level of loan payment that would be affordable for the home owner/borrower. The actual loan modification will usually result in a new loan with lower interest rate and lower monthly payments. To achieve this goal, the new loan may capitalize old loan interest, have a longer term, or higher amortization.

Pre-foreclosure Sale
A pre-foreclosure sale occurs when the borrower sells her property privately before the lender holds a public auction. A pre-foreclosure sale is an option when the borrower can sell the property for an amount higher than the existing remaining loan balance, and can therefore payoff the lender in full. Lenders usually prefer this option to foreclosure because it saves them money that would normally be spent taking back the home through the foreclosure process. It also saves time and brings the bank’s investment back sooner than foreclosure. Paying the lender back anything less than the full amount owed is considered a short payoff.

Short Payoff
This is when the bank agrees to be paid off an amount less than the outstanding principal balance of the loan. To complete a short payoff, payment is usually requested by the lender in one lump sum, in cash or in the form of a new loan from another lender. A short payoff will be approved by the lender when taking the property through foreclosure would be likely to result in a lower amount of returned principal.

Short Sale
When the property is worth less than the remaining outstanding balance on the loan the owner can attempt to sell the property short. This means when the property eventually sells, the lender will be returned an amount of money less than what is actually owed on the property. This is similar to a short payoff, except in this situation the borrower is selling the home to raise the funds necessary for loan payoff, as opposed to refinancing the mortgage or making a cash lump sum payment. Short sales are only approved if the lender believes it will net less cash upon a foreclosure, and usually only after the borrower displays a financial hardship or a significant loss of market value in the property. With a short sale, the lender has to approve the purchase and sale agreement, which can take some time, but this is a good option for some sellers who have a marketable home.

Deed in Lieu of Foreclosure
For those who can’t make payments at all and don’t care to live in the property anymore they can offer the bank a deed in lieu of foreclosure. With a deed in lieu of foreclosure you are giving the title to the home back to the bank, which transfers the property in its entirety to the bank. This saves the bank time and money of having to actually go through the foreclosure process to gain the right to take title back to the home. This allows the bank to speed up the sale of the home and recoup its investment sooner. Like a short sale, the bank must approve the transaction before a deed in lieu can be completed. The deed in lieu process can take anywhere from a few days to a few months, but is usually a quicker process than either short sale, foreclosure, or loan modification.

Bankruptcy
This is the last resort for borrowers behind in loan payments. To declare bankruptcy means you are insolvent, or simply put, your liabilities (what you owe) outweigh your assets (income and property value). This is a legal proceeding administered by the courts, which puts the borrower on a payment plan and decides which creditors are repaid and which aren’t. Bankruptcy is a legal action which requires the help of a qualified, licensed attorney, and could become a costly endeavor. Bankruptcy may stop a foreclosure permanently, or just delay it. Depending on the type of bankruptcy declared, your credit report could be marked for up to ten years, seriously limiting your ability to obtain loans and credit in the future. Check with your lender if you have additional quesions about bankruptcy.

In most cases your lender will work with you to resolve any loan issues you might be facing. The lender wants to get your loan payment not your property. If you are currently behind in payments, or think you might soon get behind, make sure to call your lender immediately. The further behind you get the fewer options you will have available, and the bank will have less incentive to work with you in resolving the issue.

Remember, communication is key. If you’ve employed one of these eight techniques to avoid foreclosure you’ll likely need to submit new paperwork to the bank and wait for underwriting. Stay in contact with your lender as often as possible, and if your situation changes in the meantime, make sure to let the bank know that as well. Also, when dealing with any legal action or possible tax consequence, be sure to contact a qualified licensed attorney and/or tax professional.

If foreclosure has become a possibility, your best move is to start gathering facts and reviewing your options in preparation for making a plan of action. The longer you wait to act, the fewer option you have available to you to help in your efforts to keep your property. However, methodical, well-researched and well thought out action is crucial. Rushing to act in a panic mode can end up causing you more harm than good.

This article is originally published at www.directlendingsolutions.com

Fastest Ways to Stop Foreclosure and Sheriff Sale

Homeowners in foreclosure, for one reason or another, often find that they have run out of time to stop foreclosure before they have run out of options that could save their homes. Often, this is due to one plan falling through at the last minute, or a simple inability of some foreclosure victims to make a decision on what to do to save their homes. By the time they have decided which option would work best for them, there is just not enough time to complete the method and actually prevent the foreclosure. When this happens, though, homeowners will often be scrambling around, looking for the most efficient way that they can put the foreclosure process on hold or stop the sheriff sale.

The fastest way to delay a foreclosure is to contact the bank as soon as the homeowners know they may begin missing payments. By keeping in touch with them throughout a financial hardship, the mortgage company will often be willing to postpone certain dates, like the initial foreclosure filing and the sheriff sale date. Obviously, this may not be applicable for homeowners who have avoided talking to the lender throughout the foreclosure process, but it is important to contact that bank as soon as possible. The lender will not always respond negatively, and they may be willing to work with the foreclosure victims to give more time or put together a solution to foreclosure. The important thing is to call the lender, though, and inform them of the situation and what is being done to avoid foreclosure.

Two dates that lenders are often willing to postpone are the sheriff sale date and the original foreclosure filing. The bank may be willing to hold off on filing the actual foreclosure paperwork, in order to give their clients more time to come up with the money to reinstate the loan, or become qualified for an affordable repayment plan or loan modification. Once the foreclosure is filed, though, interest is often accelerated and court costs and attorney fees are added into the balance of the loan, making it more difficult to qualify for a solution.

We have discussed stopping a sheriff sale in other articles and on our blog, so readers are referred to those entries, but lenders will often delay a sheriff sale if there is a reasonable solution being offered them. A thirty-day postponement is often all homeowners need to work out a long-term solution to foreclosure, and banks will be glad to avoid the foreclosure auction if there is a good chance they will get the mortgage paid off in other ways.

However, lenders are much more strict on the end of redemption, unfortunately. They do not like postponing this important foreclosure date, since they have waited such a long time to take the property back in the first place. If the homeowners have been in contact with them, though, they may be willing to provide more time to move out, postponing the actual eviction process for a few weeks. This may not help homeowners dramatically, and will not result in saving the house, but lenders do not want to forcefully evict former clients, either. Giving an extra couple of weeks to effect a peaceful transfer of the property and prevent damage is in the bank’s best interests.

Unless the foreclosure victims need more than a few weeks, though, it may be a good idea to start looking for other places to live once the end of redemption comes close. Obviously, the mortgage company will not let them live in the house for a long time until their income recovers or they can qualify for a new mortgage, since the bank will want to get the property ready to sell to make back the money they lost on the loan they made that went into foreclosure.

Often, the fastest way to delay an important date in the foreclosure process is simply to keep the bank informed and ask for more time, based on the chances for success of the method being pursued to stop foreclosure. Gaining more time during the foreclosure process can be an easy procedure or it can be like pulling teeth, depending on how much communication there has been between the homeowners and the lender. As early in the financial hardship as is possible, foreclosure victims need to begin working with their banks to find solutions to foreclosure, and work on various options on their own, as well. Then, in the event a plan falls through at the last minute, the bank will much more willing to put a hold on things in order to give the homeowners, who have been working hard on finding solutions, more time to complete a plan and save their homes from foreclosure.

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How to stop Foreclosure and Bankruptcy Guide. Sell or not sell your house?

How to Stop or Avoid Foreclosures

Can you protect yourself from bad things? The answer is NO. Financial difficulties (including losing job, house, foreclosures, etc) can come to anyone, despite of your color, age, or even religion. The problem is that not every person who has financial difficulties is ready to admit he or she is trouble and needs help or at least needs guidance on how to deal with the situation, how to save home, credit, which option to choose, how to save what you have now…

Doing NOTHING is the worst thing you can do. Do SOMETHING!

6 Ways to Avoid Foreclosure & Save Credit
You Can Save Your Credit and Your Home From Foreclosure

Are you facing Financial Difficulties and about to lose your home? Financial difficulties can be the result due to various reasons. Some of them could be:

* Health problems
* Market changes
* Family member death
* Rising Mortgage payments
* Job loss
* Divorce
* Medical bills

You name it, it can be anything. But, yes, you can stop foreclosure and save your home and even save you family. However, you cannot delay another day, you need to act now. A lot of times home owners wait just too long, and the house has too much debt, late payments, fees, etc. And even investors may not be able to buy your house. For example, a short sale, in this case, might be an option, where an investor negotiates with the bank to purchase the house at a discount. Though it is a time consuming process, which would not save your credit and would not harm as much as foreclosure, it will stop the foreclosure process.

Some of your options to avoid foreclosure are:

1. Doing nothing and going into foreclosure. That is right, do nothing, hope for the best and get foreclosed by the bank. This is not the end yet, you will lose your home, get your credit ruined (the credit score can drop by 100-150 points for being late on the mortgage for couple months ), you home will be sold to the highest bidder at a public auction, you will be evicted by a new owner will have to start everything from scratch, NO BANK will work with you for a number of years after the Foreclosure. So think really well before letting the mortgage company to foreclose on your house. Do something, anything… just to avoid going into foreclosure.

2. Refinancing.You can refinance the existing loan with the current or a different lender. You would need to do the research on the terms and find a lender that has most attractive terms. This would involve you negotiating with a lender and filling out new paperwork. Be aware though of adjustable rate mortgages. If you got in trouble one time because of the adjusted rate on your mortgage, don’t fall into the same trap again. Fixed rate mortgages are your best bet.

3. Bankruptcy. Believe it or not, some choose to file Chapter 7 or Chapter 13 bankruptcy to avoid the Foreclosure. The truth is, there is no guarantee that Bankruptcy will stop Foreclosure. Bankruptcy may prolong the foreclosure and buy you more time; foreclosure proceedings can be temporarily suspended. However, the mortgage company can apply to the court for relief from the automatic stay, the order preventing creditor action by virtue of the bankruptcy. IF you get lucky, you may have all your debts wiped out completely, but in most cases, you would still need to repay past due amount and to negotiate with your mortgage company to keep your home. Therefore, your circumstances must be well suited for this option as you might end up in worse position that when you started. This option should come only as a last resort.

4. Short sale is the sale of real estate when a lender is willing to accepts a loss – less than what to you owe on your mortgage. If there is no equity in your home to pay commission, closing costs in order to sell it or pay off your mortgage, then you might consider this option. However, this is a very time consuming and complicated process and your property can be sold only to a so called cash buyer. Therefore, you should not be completing a short sale on your own, but be better off if you hire a professional who has experience in short sales. Listing your house and waiting for an offer is not the best approach because you will lose the valuable time, and very few Realtors know the short sale process. Local home buyers such as investors, who specialize in buying houses fast, might be a better solution. Usually they charge you nothing to purchase your home and the bank does not have to go through the foreclosure process.

5. Loan modification or forbearance agreement is re-negotiation of the terms with your mortgage company. You can go back your lender and ask to modify or restructure your loan. Some lenders will work with you and modify your loan by adding your back payments to the end of the existing loan principal, changing the interest rate or extending the term of the loan. You need remember, that the lender will not forgive the back payments – earlier or later you will need to pay these off. Also, in most cases the monthly payments will increase as a result of the spread out back payments, so make sure you can afford the new monthly mortgage payments.

6. Pre-foreclosure sale / fast house sale will usually allow you to sell your house before you lender sells you home at a public auction. You may want to check on the timelines in your state, how much time you have before the auction date. If you can sell you house before the lender takes it then do it, even if it means that you will walk way only with the mortgage balance to cover the loan. Some real estate agents can work with you on selling your house and try finding you a buyer, but it may take more time because agents can work mostly with buyers that can qualify for a loan. Real Estate investors might be a better option in this case as they usually have funds ready to buy houses or work out another plan to stop your foreclosure process. Investors will buy your house As Is and in most cases they are able to close quickly, sometimes in couple days, inf necessary. You will win buy selling your house quickly, but you will have to take a loss and often times settle for a mortgage balance (you should try to get your mortgage balance covered) either by getting a new loan and paying yours off or by taking over payments on the existing mortgage until that investor sells the house or refinances on the house. In any case, you will win because the foreclosure process will be stopped, you will save your credit and you will be able to move on with your life.

You need to choose an option that is best for your situation. For example, if you know that you cannot afford the house, you will not choose loan modification as this option may not help you to lower the monthly payments, but often times monthly payment might temporarily increase until payments get current. Similarly, a short sale might not be a good option if you do not know how to negotiate with a lender to accept less than what is owed on your mortgage or if you’re want to get your equity.

Therefore, you need to know what you are trying to achieve and choose an option that best suites your needs. Options like doing nothing, filing a bankruptcy or a short sale will not save your credit. But if you are about to fall behind or you are already couple months behind on payments, your best alternative is to sell the house as soon as possible and avoid the foreclosure.

BUT, DON’T JUST SIT and DO NOTHING… DO SOMETHING…

If you’re really serious about avoiding foreclosure, even if your home needs work, even if there is no equity in the house, even if you owe more than it is worth, even if you think that everything is hopeless and you have no money to spend, or if you are falling behind on payments or know someone who is, you can sell your house fast and stop foreclosure. The only thing you’ll need to do is to complete this sell your house fast and stop foreclosure form to learn about your options.

[This is article is originally posted at squidoo.com]

Fewer Americans File for Bankruptcy

After steadily climbing for several years, the number of Americans filing for bankruptcy is on the decline, though that is not necessarily an indicator of an improving economy.

The number of bankruptcy filings in June was 120,623, or an average of 5,483 a day, a drop of 6.2 percent from May, when filings totaled 122,775, or 5,846 a day, according to a report from Epiq Systems, which tracks bankruptcy filings. There was one additional day to file in June compared with May. Average daily filings are down nearly 10 percent from June of last year.

Though economic factors like foreclosures and unemployment play a role in bankruptcy, over the long run, the filing rate tends to be more closely tethered to the amount of outstanding consumer debt.

Access to credit, however, can influence the bankruptcy rate over the shorter term: as lenders tighten their standards, filings tend to rise because struggling consumers can no longer rely on credit cards or other loans to get them through a rough period. But when more new loans are being made, filings tend to fall — at least for a while.

“There is a lot of mythology about what drives bankruptcy rates,” said Robert M. Lawless, a professor at the University of Illinois College of Law who specializes in bankruptcy. “But consumer credit appears to be the most significant indicator.”

Over all, he said he expected filings to decline 5 to 10 percent this year, leveling off at about 1.46 million, largely because consumers have slightly more access to credit now than in recent years. But he also said that consumers had taken on less debt in the past three years, which means there is less debt to discharge and fewer incentives to file bankruptcy.

That estimate compares with about 1.56 million bankruptcy filings in 2010 and nearly 1.45 million in 2009. Filings surpassed two million in 2005, when many people rushed to declare bankruptcy before a new law went into effect that made it more difficult, and significantly more expensive, to file.

There have been 731,237 filings this year. “If they keep going the way they were,” Professor Lawless said, “bankruptcy filings will keep going down a little bit.”

So far this year, the vast majority of the bankruptcy cases — nearly 70 percent — were Chapter 7 filings, which provide individuals with the proverbial “fresh start” because their debts are forgiven. (To qualify, filers need to pass a means test to determine whether they are unable to repay their debts.)

In contrast, a Chapter 13 filing requires individuals to use their disposable income to pay back a portion of their debts through a three- or five-year repayment plan. Some people choose Chapter 13 because it allows them to save their primary homes from foreclosure, though they are required to catch up on their mortgage payments. Slightly more than 27 percent were Chapter 13 filings. (The remainder were mostly commercial filings.) The overall split between Chapter 7 and Chapter 13 filings is consistent with last year’s ratio.

While the overall number of bankruptcy filings was down last month, there were variations from state to state. For instance, filings in Georgia rose 13 percent and were up 33 percent in Delaware, compared with May. But filings in Wyoming fell 30 percent, in South Dakota 21 percent, in West Virginia 18 percent and in Wisconsin 17 percent.

In both New York and New Jersey, the number of bankruptcy cases dropped by 5 percent.

Source: www.nytimes.com, By TARA SIEGEL BERNARD (Published: July 6, 2011).
A version of this article appeared in print on July 7, 2011, on page B3 of the New York edition with the headline: Fewer Americans File for Bankruptcy as Debt Woes Ease.