Avoiding Bankruptcy

Foreclosure happens when a homeowner is unable or unwilling to make his or her mortgage payment. Foreclosure is a complex topic and one for which there is a host of information available. However, here we’d like to point out some important things to someone who fears foreclosure and is thinking of selling his or her home.

• By the time a lender files a foreclosure suit, most of the damage to a borrower’s credit score has already been done.
• Once a foreclosure action has been filed, nothing that happens after that has much impact (good or bad) on one’s ability to obtain future financing.
• Even if a foreclosure suit has been filed, the homeowner retains most of their rights (including occupancy and ability to sell the property) until a judge rules in favor of the lender and awards a foreclosure judgment.

A Foreclosure Judgment: A Path toward Bankruptcy

Often, a foreclosure will push a homeowner towards bankruptcy. Once a foreclosure judgment has been entered, an auction is held by the sheriff. If the property sale does not satisfy the lender’s claim there is a deficiency judgment. The deficiency judgment is equal to the amount owed by the debtor, less whatever price is obtained at the auction.

Since this is a large sum and the debtor rarely has a large amount of money at their disposal, the debtor often is forced into bankruptcy. The lender has a legal right to pursue the debtor for the deficiency judgment. A bankruptcy stays on a debtor’s credit report for ten years affecting one’s ability to obtain future financing. As a result, a foreclosure judgment is rarely the preferred end result.

A short sale occurs when a mortgage lender agrees to accept less than what they were owed upon the sale of a property. While the lender is not required to release the borrower from further liability, some will and in fact, we have successfully negotiated this key benefit in every single case.

We have had great success in being able to negotiate a complete release from liability. This is a huge benefit for the borrower because it can keep him or her out of bankruptcy, preserve whatever cash he or she may have, and give the borrower a chance at a new start.

In some instances, we have even been able to negotiate a relocation check for our clients to the tune of several thousand dollars. In all cases that we have been involved in, the homeowner has been able to live in their home during the time they were actively selling the house and waiting for the closing to occur.

Important Notice: Mars Disclosure for General Communications

We sometimes provide services to or on behalf of sellers, which would be covered by the MARS Act, as mandated by the federal government. We are providing this disclosure just in case it applies to you.

Helpful Information

Even though we covered many of the key topics of house selling, there is a lot more information out there. Turn to us for a wealth of information that might prove useful and helpful during the selling process. There might even be something there that could make you some money, speeds up your house sale, or saves you from making a huge mistake.

Indy’s Choice Real Estate is not associated with the government or your lender, and our service is not approved by the government or your lender. Even if you accept our offer and use our services, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.

Bottom Line

If you’ve fallen behind on your mortgage payments, don’t despair and don’t give up. There are options available to avoid filing for bankruptcy. Call us and we will be glad to explain your options and how each one of them could impact you in the present and in the future.

Rely on our unique skills and experience that will allow for faster and more beneficial short sale negotiations on your behalf. There is no cost or obligation when you contact us to find out more. Plus our services are completely confidential.