Know More About Foreclosure and Bankruptcy
As the market declines, many people are facing foreclosure and bankruptcy. People are unable to pay their bills and mortgages. The money they are getting is just not enough especially as the cost of living increases. They have to pay for utility bills, clothes, school, children and other necessary expenses each month. Sometimes, this can be so overwhelming that they file for bankruptcy. Foreclosure and bankruptcy often go hand in hand.
Bankruptcy is when the debtor files for relief from all the creditors and lenders. Here are some key information about bankruptcy:
• Bankruptcy stays on your credit report for ten years. This means that it will be harder for you to purchase a new home in the future because of this record.
• When you file for bankruptcy, an “automatic stay” comes into effect. Creditors and lenders will not be able to go after you to collect their money. This is usually temporary.
• If you file a Chapter 7 bankruptcy, you are asking the bankruptcy court to wipe out all your debts. The bankruptcy trustee will then get any property or assets that you own and sell it. The proceeds will be distributed among your creditors and lenders.
• If you file a Chapter 13 bankruptcy, you are filing for a repayment plan. You are going to repay your debts over a period of time.
Foreclosure and bankruptcy are closely associated. Foreclosure means that your house will be repossessed by the lender because you were not able follow up with your monthly payments. What should you know about foreclosures?
• The lending company is not the enemy. They were the ones who offered you your “dream house”. You are the one who is not able to pay.
• They only want their money back. Every month that you are unable to pay, the company suffers. They are only after what you owe them.
• Most companies do not want to go through with a foreclosure. It involves too much work to push through. You can actually negotiate with them to lengthen the time period of the loan or reduce monthly interests.
Foreclosure and bankruptcy can greatly affect your credit report. You must take the necessary steps in order to avoid foreclosure and bankruptcy. Imagine if you do not have any place to live. Where will you go? Protect your home. It is an investment for your family and the future.
