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12-26-2008, 08:39 AM #1
- Join Date
- Aug 2005
- Location
- Lexingon Kentucky
- Age
- 51
- Posts
- 1,727
1997 Grand Cherokee- 1999 Firebird.
Foreclosure or bankruptcy? Which is worse?
Ok. My little brother is in a tight spot. He's several months behind on his house payment and he lost his job a few months ago. He's facing foreclosure among other things and he was asking me if filing bankruptcy would be a better option. I don't know what to tell him and he has an appointment with an attorney on monday. The house has been on the market for a while now. Any thoughts on this matter? I thought bankruptcy stayed on your record for a long time but I don't know about foreclosure. Thanks for any suggestions or ideas!
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12-26-2008, 09:04 AM #2
- Join Date
- Apr 2008
- Location
- Charlotte, NC
- Age
- 35
- Posts
- 862
Black 2002 T/A M6- Green 1997 Ram 4x4
Don't quote me, I'm no finance expert, but from what I understand about the two..
Both are going to fuck your credit and make it all but impossible to pay with anything but cash for nearly a decade. However, declaring bankruptcy is kinda like being convicted of a Felony. You do your time, get your life back together, get on your feet, but it's always going to hang over your head, and doors will close for the rest of your life.
Foreclosure is closer to defaulting on a loan, which never looks good, and still kills your credit, but it's not nearly as big of a shadow as bankruptcy. It'll eventually be mostly swept under the rug, and will be easier to make light of in later years during a job interview or loan application due to the current state of the economy and formerly secure, sought-after jobs being abolished. A bankruptcy declaration on your record will always make people think your an idiot who can't balance his checkbook, and they won't read any further.
Just my .02.
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12-26-2008, 09:07 AM #3
- Join Date
- Mar 2006
- Location
- Humble, TX
- Age
- 47
- Posts
- 84
pewter- 1999 Camaro SS
i think i would rather declare bankruptcy and keep my house than lose it. it really depends on the equity you have, condition of your mortgage, etc.
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12-26-2008, 09:14 AM #4
- Join Date
- Feb 2006
- Location
- Seattle..Land of Constant Rain..
- Posts
- 1,425
Red Fire- 2007 Mustang GT/CS
Definately consult a lawyer.. There are levels (chapters) to bankruptcy, some may let you keep your house..
A foreclosure certainly will not.
Both will pooch his credit...certain chapters will allow you to keep certain possesions..although others will cause you to sell most items of value.
I would talk to someone that knows how these things work.
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12-26-2008, 09:18 AM #5
- Join Date
- Mar 2006
- Location
- Humble, TX
- Age
- 47
- Posts
- 84
pewter- 1999 Camaro SS
^^^^exactly, and depending on what chapter you file (he'll probably be chapter 13), you're credit isn't as screwed as you think it would be. it's still on your credit for 10 years and so on, but you're not limited to only being able to buy stuff for cash, and you don't have to liquidate your assets. you'll still be able to finance things, but the advice would be to finance things more wisely in the future.
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12-26-2008, 09:32 AM #6
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12-26-2008, 09:42 AM #7
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12-26-2008, 09:51 AM #8
ch13 if he KNOWS he can afford to make the payments
otherwise let it go. BK is worse for your credit. Does he have other debt piled up, past due... or just his house pmts he's having trouble keeping up with?
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12-26-2008, 09:57 AM #9
- Join Date
- Aug 2005
- Location
- Ft. Lauderdale, FL
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- 75
- Posts
- 2,706
Sebring Silver- 2000 CamaroSS
He needs professional help, of which I have none so I kept quiet.
Bankruptcy is best left to a professional as well. Many BR attorneys will give free consultation.
Personally, I'm three years out of bankruptcy & have a 690 credit score, two credit cards at les than 8% APR, and qualify for home & auto loans at the same rates as others who have not been bankrupt.
Bankruptcy records go back only 10 years.
A forclosure will always show as a bad debt.
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12-26-2008, 10:03 AM #10
- Join Date
- Feb 2006
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- Seattle..Land of Constant Rain..
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- 1,425
Red Fire- 2007 Mustang GT/CS
^^
There is some truth to this. A bankruptcy cannot be repeated for years and lenders know this. So some are willing to lend to a BR claimant before they will lend to a Foreclosure victim. F/C simply shows you bit off more then you could chew (for whatever reason) and had to walk away. And can do so again. A B/R claimant cannot.
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12-26-2008, 10:12 AM #11
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12-26-2008, 10:33 AM #12
- Join Date
- Mar 2006
- Location
- Humble, TX
- Age
- 47
- Posts
- 84
pewter- 1999 Camaro SS
correct. a chapter 13 consolidates all of your debt into one large payment, and you have to pay EVERYTHING you owe, just at a restructured payment. my payment is $2k/month, but it includes my house note and a car note
^^there is truth in this statement
chapter 13 shows you got into some trouble, but you are willing to pay what you owe. F/C shows that you are willing to just write off a debt, which makes lenders leery of letting you borrow their money
10 years on either a F/C or B/R
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12-26-2008, 10:35 AM #13
- Join Date
- Aug 2005
- Location
- Ft. Lauderdale, FL
- Age
- 75
- Posts
- 2,706
Sebring Silver- 2000 CamaroSS
Interesting
http://www.isnare.com/?aid=329905&ca=Real+Estate
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12-26-2008, 10:40 AM #14
if i had a dime for everytime i've told debtors the exact same thing..
"IF YOU DIG DEEP ENOUGH, it won’t take you long to realize that you can probably STOP or STALL your foreclosure by yourself. You don’t need to pay a total stranger thousands of dollars and hope they will do the job for you – I know I wouldn’t."
i just realized its my 1000 post again...
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12-26-2008, 10:53 AM #15
- Join Date
- Aug 2005
- Location
- Texas Department of Corrections
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- 18,128
- Retired Outlaw Sum Bitch
Depends on many factors......consult an attorney that specializes in BK...
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12-26-2008, 12:35 PM #16
I filed bankrupcy because of a bad divorce in 2002. since then I have been able to finance a car, a home, 2 credit cards, 2 diferant yamahas at seperate times, and a $30,000 harley. The harley is my only payment other than the house.
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