Posted by: admin in credit repair for chapter 13 on
ami asked:
Ok, here’s the situation. We ended up defaulting on our mortgage in September. We were scheduled for a foreclosure sale on December 14th. We filed chapter 13 on December 1st. We had EVERY intention on paying this bankruptcy and making things clear. BUT…I lost my job last month and now our chapter 13 is being dismissed. We will refile next month. The problem is, we obviously cannot afford our house now. My lawyer has recommended that we let the house go in foreclosure. So this is my question: Will this show up as TWO foreclosures and a bankruptcy? If I get our lender to agree to “deed in lieu”, will THAT show up as a foreclosure?
Responses are currently closed, but you can trackback from your own site.
Ok, here’s the situation. We ended up defaulting on our mortgage in September. We were scheduled for a foreclosure sale on December 14th. We filed chapter 13 on December 1st. We had EVERY intention on paying this bankruptcy and making things clear. BUT…I lost my job last month and now our chapter 13 is being dismissed. We will refile next month. The problem is, we obviously cannot afford our house now. My lawyer has recommended that we let the house go in foreclosure. So this is my question: Will this show up as TWO foreclosures and a bankruptcy? If I get our lender to agree to “deed in lieu”, will THAT show up as a foreclosure?
I realize that these are both big stink bombs in our credit life. However, we are good people and have learned from our mistakes. I know it is going to take time to repair.
listen to your lawyer
There are extenuating circumstances that have caused many Americans to file bankruptcies and suffer home foreclosures. Your credit history will reflect that you did your best during the housing and credit bust just like millions of similarly situated Americans.
A deed in lieu of foreclosure is not a foreclosure, and your Chapter 13 filing halted the earlier foreclosure proceedings. At this point your credit history should not reflect a foreclosure, but it will reflect the various defaults under your promissory note and mortgage.
You have paid your lawyer for good legal advice. If he or she believes that it is in your best interest to let the lender foreclose, I assume that he or she knows that is the case.
You are free to contact the lender yourself and offer to execute a deed in lieu of foreclosure in exchange for their promise not to report a foreclosure to the credit rating agencies. If they won’t do that, then what incentive do you have to make the process of acquiring ownership of your home less expensive for the lender? (And that includes forcing them to evict you should they fail to offer you a substantial amount of cash to relocate after the foreclosure.)
Good luck.