Tip:
Highlight text to annotate it
X
Are you facing tough financial decisions? Trying to decide if you should declare bankruptcy
to avoid a foreclosure or whether you should wait for the foreclosure to happen and then
declare bankruptcy? This can be a very scary and confusing time, but I want to share some
information that may give you an insight on what path you should take.
Hi, I'm Jim Keaveney of Keaveney Legal Group. We are a New Jersey and Pennsylvania based
law firm that focuses on foreclosure defense and bankruptcy. We regularly counsel our clients
on the advantages and disadvantages of both bankruptcy and the foreclosure process, and
help them find ways to maximize their opportunities through well-thought-out legal strategy. Join
me as we discuss this topic today.
Topic:
When it comes to declaring bankruptcy before foreclosure, whether or not you should do
it really depends on your goals. If you want to delay the foreclosure for a while because
you believe you have no other options for staying in the home, then a bankruptcy might
be a good way to do that. Similarly, if you want to avoid the possibility of a deficiency
judgment against you after the foreclosure, a bankruptcy could wipe out that obligation.
If, on the other hand, you would prefer to keep the property but cannot afford the current
monthly payments, you may want to explore other options. For example, you may be able
to obtain a loan modification without going through bankruptcy or foreclosure. This may
dramatically reduce your monthly payments and allow you to keep your home and your investment.
Of course, you might be able to do that after a bankruptcy, as well, but you would usually
have to reaffirm the debt in your bankruptcy. Reaffirmation means that you agree to pay
all or a portion of the debt that might otherwise have been discharged in bankruptcy. As a result,
it might be wise to pursue a loan modification before filing for bankruptcy since the modification
may remove the circumstances putting you into bankruptcy and it can keep you from reaffirming
a debt that otherwise might have been discharged simply so you can keep your home. That way,
if you still need to pull the safety valve of a bankruptcy, you can safely count on the
mortgage debt being discharged, as well. Another important consideration is upkeep
of the property. Many people believe that if they declare bankruptcy and move out of
the house, their obligation is over. However, in reality the owner remains obligated to
maintain the property until title transfers to someone else. As a result, you could be
held liable for code violations, homeowners association liens and penalties, and other
upkeep expenses related to the property. Therefore, you must carefully consider what you will
do with the property before deciding whether bankruptcy is right for you.
Closing:
Every case is different, so you will need to speak to an experienced attorney to get the best advice on your particular circumstances.
Here at Keaveney Legal Group, we are dedicated to helping those facing foreclosure and bankruptcy.
We understand the pros and cons of both systems, and will be happy to assist you in determining
the best course of action for your particular situation. Feel free to give us a call at 1-800-219-0939 or email me at Jim@KeaveneyLegalGroup.com. I'm Jim Keaveney; thanks for watching!