Too Many Questions yesterday… Here are the best answers I can give
The majority of the questions asked in regards to rebuilding credit and foreclosure information can be found on my companies website at www.BetterQuest.com Just click on the Fight Back section to find the question closet to your situation. I can not express how valuable this information is.
A more specific Questions I want to address is the following…
“if I receive a letter from the bank to do a short sale, is this my only option at this point? ”
This situation was from a client who lost their job, and was on medical disability until they recovered from a work related accident. They did not request forbearance and let their payment’s go. They have already filed a chapter 7, and will be going back to work soon, but just needed a little more time.
So again, with my disclosures, I am not an attorney, I am an advocate. I will show you how to fight for your rights. The short answer to this, is that more banks are using this techniqu, but no you do not have to think that this is your only option. By sending out letters stating that they are giving you 4 months to short sale your property, they are effectively hoping that you will agree and move forward to a short sale so that they can clear the debt off their books. Most people will choose the path of least resistance.
Banks are not in the business of Real Estate; they are in the business of Money. They really do not want your home, especially right now. If they see an occupied home, they MUST follow the new protocols that have been put into place, to allow the home-owner every opportunity to restructure, payoff, or challenge them. IF a bank sends their photo spy’s to your home, and they find no one there, they will begin foreclosure proceedings immediately.
Just because you receive a letter encouraging you to do a short sale on your property, you do not have to think for one moment this is your only option, unless you have truly exhausted all other options. In this particular case, the client can still move forward and do a Chapter 13 restructure through Bankruptcy even though she has already filed a Chapter 7. This is call a Chapter 20 conversion, and is perfectly legal to do.
My advice for this person is to continue to look for work, each and every day until she is employed, begin working with her attorney on the necessary paperwork for a Bankruptcy conversion so that if she get’s notification of an actual foreclosure sales date, she can coordinate with her attorney to file right before the sale.
Legally you can file Bankruptcy right up to the hour before the sale, but I would not push this. The automatic stay under Federal protection will stop the sale until the bankruptcy is dismissed or the restructure period begins.
Remember that even under a Bankruptcy restructure, it is only a 5-year solution. You can remove yourself from the bankruptcy once the payments are set via court order, but understand you will need to restructure yourself to refinance down the line. Banks don’t take kindly to being forced into these situations, and any missed payment or deliberate non-payment will end up in foreclosure action down the line.