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21

Aug 2010

Do I need to file bankruptcy after foreclosure?

Posted by / in Weekly Posts / 143 comments

Do I need to file bankruptcy after foreclosure?

As a Virginia bankruptcy lawyer, I talk to about a dozen people a month who have already lost their home to foreclosure.  When we look at the credit reports together, the first mortgage usually shows foreclosed, with a balance of $0.   And talk about the question, after the foreclosure, do I still need to file bankruptcy?

For some people, the answer is obvious.  If there was a second mortgage on the foreclosed house–those almost always sue.  Usually within a year.   If the credit cards got out of control while trying to save the house, then people need to file bankruptcy to clean up the credit cards.

But what if the foreclosed first mortgage is the only problem?

Up to this point, I’ve told people I almost never see any effort by anyone to collect on those foreclosed first mortgages.  (A couple months ago I saw a couple being sued on a first mortgage forelcosure.  That mortgage had been a rural development loan backed by the Department of Agriculture. Don’t see much of that around here.  That house had been in Culpeper County.  That may be the only time I’ve seen someone sued on a first mortgage.)

That may be about to change.  Bill and Janie (not their real names) came to talk to me about filing bankruptcy last week.

Bill and Janie had a collection letter for $137,000 from a company called Strategic Recovery Group.   This was the mortgage deficiency on a first mortgage that had been held by GMAC.  Their credit report showed “foreclosed” and $0 balance for GMAC; but now a debt collector was after them.

(The debt collector did not say they were collecting for GMAC.   They said they were collecting for Fannie Mae.  Most mortgage loans in the country are made by one of the big banks, but then sold to Fannie Mae, who bundles them up and sells them to big investors.)

Other than that, they had no credit problems,  Each had one small credit card that was current.   What to do?

Back in June, Fannie Mae put our a press release saying they were going to start taking legal action to collect on those foreclosed loans.  Looked like this might be the first sign that they were doing it.

We spent a long time talking about what was the best way to go.  The debt collector had not his their credit report, at least so far.  And there was still no sign that Fannie Mae really was suing on these.  So waiting to see what happened next was definitely an option.  That was my recommendation.  (Also, personally, I was curious.)

Why go ahead now?   This family wanted to buy a house in a few more years.   If they went ahead and file bankruptcy now, they knew they’d be back to good credit in a couple years, when they wanted to buy.

Does that surprise you?  Take a look at this chart.  It was prepared by the National Association of Realtors.  It shows the current policies of Fannie Mae, Freddie Mac and FHA.  Basically, you can have good enough credit to buy a house two years after a bankruptcy.  Three years after a foreclosure.

Bill and Janie lost their house to foreclosure about a year ago.  So if the go ahead and file bankruptcy now, the two years after bankruptcy and three years after foreclosure will end at about the same time.    If they wait to see if Fannie or Strategic sues them for the $137,000–maybe a year and a half from now–then the two year waiting period after bankruptcy would start then.  and that would put off their chance to buy a house again.

(Actually, they wouldn’t even have to sue.  If Strategic or Fannie waited a year and then hit their credit report–bam–then they’d have to file bankruptcy or never get back to good credit.)

So rather than wait and see what happens next–and take a chance on ruining their credit just as it was getting good again–they decide to go ahead and file bankruptcy now.

It was a close call, but it makes sense to me.   (So I still don’t know if Fannie Mae actually does follow up on its threat to start suing.)

(This is specific to Virginia law.  In about half the states, they cannot sue on a foreclosed first mortgage.   But in Virginia, they can.)

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Robert Weed has helped twelve thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

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143 comments
  • Leslie

    February 10, 2011, am28 10:59 AM
    01

    Are you seeing a rise in VA on collection of 1st mortgage after a foreclosure? We had to move out of state due to a job loss. We have the home loan thru Bank of America. They said we did not qualify for a short sale but nobody could tell me why. It has been almost a year the property has been vacant and they have not foreclosed on the property.

    • Robert Weed

      February 10, 2011, am28 11:58 AM
      02

      Still no sign that Bank of America sues on the first mortgage deficiency after a foreclosure. Where there’s a second, I’m seeing them sue VERY fast.

  • Mary

    March 27, 2011, pm31 6:46 PM
    03

    Immediately after divorce my ex fled the country and defaulted on support and still shared mortgage with the credit union and second mortgage with Bank of America , leaving me unable to keep up wiht payments for both, shortsell the house or refinance. I moved out of the house with the kids to an apartment and stopped paying first and second mortgage. The house is in foreclosure now and I am facing the reality of bankruptcy due to high divorce credit card bills and my ex’s credit cards he kept my name on in violation of FOD. WOuld our property settlement agreement or FOD matter and be considered in court once I am sued by Bank of America for nonpayment of second mortgage and other creditors? Divorce decree outlines it is my ex’s responsibility to pay but he is out of the country and out of reach.
    My perfect credit I had 6 months ago is now destroyed and I am still seeking ways to avoid declaring bankruptcy. Is there any rec0urse for me? My salary is not sufficient for daily expenses and rent and I am dipping into savings which I fear will be confiscated (along with our only car I just paid off )by the creditors if I file for Chapter 7, which is what credit counselors and bankruptcy attorney advise.
    Is there a rush to file for bankruptcy if the house is in foreclosure process? I also read as of July 1st allowable car value to keep will be raised to $6000. Can I wait to declare bankruptcy after the house goes into foreclosure?

    • Robert Weed

      March 28, 2011, am31 5:06 AM
      04

      Thanks, Mary. That’s a question that comes up a lot. The property settlement is only between you and the ex. It’s no defense against the creditor.

      What that means is the property settlement does NOT help you when you are sued by Bank of America for non-payment.

      You can wait until after the foreclosure to declare bankruptcy, but it might be a big MISTAKE. Many people lose their eligibility by waiting to long. For many people proving income eligibility is much easier when there’s a house payment than when there’s a rent payment. It depends.

      You may want to wait until later to file bankruptcy. But you should not put off talking to a lawyer.

  • dean

    May 3, 2011, pm31 10:35 PM
    05

    I left my house vacant 7 months ago, due to bank of america not helping me modify my loan, because my income was cut in half. I also lived in my home for 18 months without a pymt before leaving the home. I called today, and it still showing it’s in foreclosure, but no date has been set. my question is?
    when the house gets auctioned off, will they come back and sue me for the difference in what they sell the house for,back taxes that have been paid out of escrow,and taxes paid out of escrow. I have no other dept and would really hate to file unless i really need to do so. your input would really put my mind at ease. if, i need to file should i file before sale date ,or after it’s been sold.there is no 2nd. mortgage on this loan

    • Robert Weed

      May 14, 2011, pm31 12:31 PM
      06

      Usually they don’t come after people on the first mortgage–and in some states they can’t. (I don’t know where you are.) As to whether you need to file bankruptcy, one factor to consider is whether your income is too high to get approved for a Chapter 7 bankruptcy in your state once the house is gone. That’s the question you need to get answered by a good bankruptcy lawyer in your state–and answered before the sale date. When you know whether they can come after you in your state–and whether you could get a Chapter 7 approved based on your income–then you can decide if it’s safe to wait and see if they come after you. Or whether the only safe course is to file bankruptcy now.

  • Kathleen

    May 6, 2011, am31 10:50 AM
    07

    Should we file Bankruptcy? March of last year, we lost a house in foreclosurer that was sold on a Contract for Deed. My husband and I, had know idea we were responsible for this mortgage payment to CITI Mortgage, if the Buyer didn’t pay the Mortgage payment. In 2006, we purchased another house at the sametime we sold the other house on the Contract for Deed. We were missrepresented at closing Company, that later went out of business (Guaranty Closing Co.). In 2009, we went to refinance on our house we had bought, because we were on a 2/28 and our payments were rising. During that time, we found out that the loan to CITI Mortgage had not been paid and we were denied. I began researching about Loan Modifications, and pursued this loan modification with GMAC. GMAC Mortgage was our mortgage co. on the house we were living in. I filled out all their requirements, this process took them a little over a year. In the meantime, GMAC refused any mortgage payments while I was undergoing the reveiw for a new loan. By the time GMAC came to their conclusion, we were denied and owed them over $29,000.00 dollars. GMAC, gave us the option either pay the amount in mortgage payments and late fees or leave. So, we packed and left! GMAC had already began their Foreclosure process anyway. We had received a letter stating we had gone beyond the Breach Letter and our Home Owners insurance had been denied and they had taken up their own policy. Now, we have 2 homes that have gone into Forclosure. Neither of the homes had a second mortgage. This all happened in the state of Missouri. Can you please give some advice as to what we should do. We aren’t interested in buying a home ever. We have decided that renting has more freedom. However, we know that our credit is ruined. So, should we file bankruptcy on these houses or not? We would eventually like to buy other things, such as…vehicles and so on. Do you know what will happen to our vehicles if these Mortgage Companies take action? We still have loans on the other items. Please, HELP!! Sincerely, Kathleen

    • Robert Weed

      May 14, 2011, pm31 12:23 PM
      08

      If you were in Virginia, we’d meet, look at your whole credit report together, talk about your goals and plans (you included some of that) and spend an hour deciding if you needed to file bankruptcy. Your note is very complete, but there are some more questions a good lawyer would ask, to make sure the picture is complete. You definitely need to look at filing bankruptcy. But whether it’s right for you–you need a good lawyer to discuss that with very carefully.

  • Boe Christiansen

    June 2, 2011, pm30 4:48 PM
    09

    I got divorced my wife insisted on keeping all three properties knowing that she could not afford them. She kept them in the divorce decree and 2 of them allready foreclosed. The one that is left she has not made a payment since 3/2008. She is behind $101,000.000 and has not paid the HOA FEES now there is a Lien on the property for the dues on the Hoa Fees. The Bank of America has not foreclosed on the property. I claimed Bankruptcy chapter 7 and was discharged on 5/2009. My ex-spouse has been trying to modi the Loan with my name still on the loan is that legal. She refuses to refi. When in the divorce decree she was to try and refi every 6 months until my name was off the loan. Her credit is really bad.. she went and maxed out every credit card she could and with drew big amounts of funds from each card we are talking $20,000.00 in one card that I know of. This is happening in Oceanside, CA 92057. Can I sue?

    • Robert Weed

      June 2, 2011, pm30 7:38 PM
      10

      That’s more of a divorce question than bankruptcy. Sorry I can’t help with that.

  • Marcie

    June 5, 2011, pm30 4:26 PM
    11

    My family and I own a home in NC but had to relocated to VA since we lost our jobs, we have subprime loan and it consist of 2 mortgages. We have stopped paying on the loan and it has been a over 1 year and we haven’t been paying homeowner dues. We tried to get help with the mortgage but never could. We are highly considering Chapter 7 bankruptcy for a fresh start, could we still be sued by our second mortgage company? We are currently not in foreclosure.

    • Robert Weed

      June 6, 2011, pm30 1:50 PM
      12

      The bankruptcy will stop either of the mortgage companies from coming after you. and it would wipe out whatever you are behind with the home owner association. But you would still owe the HOA from the date of the bankruptcy, until the actual foreclosure, that would be at least three or four months, and could be a lot more. there’s no telling.

  • Drake Schouserton

    June 8, 2011, pm30 2:03 PM
    13

    Mid January of this year, I was let go from my employer because of downsizing of the company. A week later we found out that we are going to have another child due in late Sept. Since then, we have fallen behind in almost everything we have. With this in mind, my wife received an inheritance for her late father last year. We have those in funds in Wells Fargo for our retirement some day. My question is, can the Bank of America go after that inheritance money if the property is forecloses? And, should we file for bankruptcy if our home does get foreclosed especially if there is a balance after the sell?

    • Robert Weed

      June 9, 2011, am30 6:01 AM
      14

      Thank you for your nice comments.

    • Robert Weed

      June 9, 2011, am30 6:07 AM
      15

      Don’t know what state you are in, but you need to talk to a very good bankruptcy lawyer there about your family situation. Is Bank of America of America your first mortgage? In some states they can’t go after you. In some they can but hardly ever do. You need to sort that out.

      Then you may need a plan to–legally–move your wife’s inheritance over into a retirement or other protected account. How long that would take depends on how much it is and also possibly on your state laws. That could be very tricky.

  • Marcie

    June 8, 2011, pm30 7:11 PM
    16

    Hi Robert,

    If we are get foreclosured on before filing bankruptcy would this wipe out the HOA fees? I also want to know is it best to file bankruptcy before a foreclosure happens? Also does it matter what state you file bankruptcy in or would we have to do it in NC because our house is in NC?

  • Drake Schouserton

    June 9, 2011, am30 10:26 AM
    17

    We live very close to your office in MD. Yes, this is our first and only morgage. If you could talk with us that would be great, or maybe you know someone in the Bethesda, Montgomery County area. Thanks Again.

  • david arriola

    June 22, 2011, am30 12:06 AM
    18

    I buy a property in Florida, in 2006,was a investment with my brothers ,but Indy Mac mortgage was on my name only.This property will be on foreclosure,now is in short sale.I got another investment property here in Georgia,chase home mortgage, in short sale. and i got another investment almost paid off with chase home mortgage what you recomend me to do. if the banks going to sue me. after the foreclosure.Thnks

    • Robert Weed

      June 24, 2011, pm30 1:07 PM
      19

      You have a complicated situation and you definitely need to talk to a lawyer.

  • Melinda

    June 26, 2011, pm30 5:11 PM
    20

    Mr. Weed,
    My house was foreclosed in 2009 by First Franklin Mortgage. Since then they have closed and sued for illegal practices. Before this happened I called First Franklin to make fure I didn’t owe anything on either loan and never got to speak to a live person or my calls returned.

    When the house foreclosed (I had a 1st & 2nd mortgate) it was purchased by BOA and they never contacted me to let me know they had purchased the loan. Fast forward to two weeks ago when I applied for a new job and they pulled my credit, it showed I was in collection for 50k. When I called BOA I asked if I could make payments they said no.

    I don’t wan to file bankruptcy because I have no issue now with paying my bills and no issue with paying payments to BOA but if they won’t negotiate is bankruptcy my only option? Or can I have an attorney help me negotiate a payment plan with them outside of bankruptcy? They’ve already charged off the 50K and no collection attempts have been made by them.

    Thank you,

    Melinda

    • Robert Weed

      June 27, 2011, am30 6:25 AM
      21

      You didn’t tell me whether the $50,000 past due on your credit report caused you to get turned down for that job. I hope not. I’d also be interested to know if the $50,000 is just parked on your credit with a date of 2009, or are they re-reporting it as late every month.

      If they won’t negotiate, then your options are bankruptcy or proving BOA doesn’t really own the loan. I do think they will negotiate, though; you got the wrong department the first time you tried.

      Especially if they are reporting you late every month, avoiding bankruptcy doesn’t protect your credit–it just guarantees it will stay bad. Also, under the 2005 bankruptcy law, as your income improves, you can lose your eligibility to file bankruptcy. That’s why I recommend talking to a lawyer before the house goes to foreclosure.

      If you had filed bankruptcy in 2009, you would have ok credit today, and be able to be a home owner again probably next year. I hope a negotiation strategy works for you now.

  • Melinda

    June 27, 2011, pm30 2:40 PM
    22

    Mr. Weed,
    Yes the past due amount caused me to not get the job. Yes, the 50,000 is just parked on my credit report and has not been updated since 2009. Do I negotate with BOA or hire an attorney to negotiate the charge off?

    Thank you,

    Melinda

    • Robert Weed

      June 27, 2011, pm30 7:29 PM
      23

      If the $50,000 caused you to not get the job–you are my poster child for why you should file bankruptcy, and not try to do things the hard way. Why are you just protecting your bad credit? Clean it up!

  • talal haizoun

    June 28, 2011, am30 12:40 AM
    24

    Hello,
    i have my first mortgage with Chase and my 2nd home equity loan with BB&T.
    I have tried 2 times to get a loan modification with Chase but no luck.They are still reviewing my case for a third time.Yet, i just received a letter from Chase stating the beginning of the foreclosure process.I started the Loan modification process 17 months ago and i have not made any payments since then.My first loan with Chase is now 397,500.00 including fees and my 2nd mortgage with BB&T is 50.000.00.
    i am hoping to get aloan workout before they foreclose on me.My question is what is my best option to get out of this mess and not being sued for any remaining debts after the foreclosure since the value of the house has decreased.I live in Falls Church Virginia

  • Melinda

    June 28, 2011, am30 10:33 AM
    25

    Mr. Weed,
    I don’t think I qualify for bankruptcy. Since the foreclosure, I’ve got all my finances in order. I’ve paid off my car, a personal loan, and a credit card since then. I’m already in a credit counseling program taking care of all my other debt I got while trying not to foreclose. The BOA debt is the only thing. I’m open to doing the bankruptcy.

    Do you think I’d even qualify for bankruptcy?
    Thanks,

    Melinda

  • Nate

    June 29, 2011, pm30 1:42 PM
    26

    Hello,
    I had purchased a home in VA for $490,000 back in 2006. My ex-wife and I had some medical issues followed by some marital issues that ultimately led to our split. I had my first mortgage with America Service Company for $390,000 and Second with Ocwen for $100,000. After the foreclosure in Nov. 2008, the house foreclosed for $415,000. ASC wrote off the debt on my credit, but I still get bills every month from Ocwen, even after foreclosure. The 2nd mortgage was not a refi, but part of the original loan. Still to this day I get these bills, but no collection. It also hits my credit report. Besides this, i am ok, little to no credit card debt. Is filing bankruptcy an option for me, even if they dont sue? My credit score is 675 right now. Will they write off the mortgage or settle for less?

  • Jennifer

    July 6, 2011, pm31 5:54 PM
    27

    I foreclosed on my property in VA last Oct (2010) bc BOA kept sending me paperwork for modifications, then they would need update and this cycle went on for nearly 2 yrs. I finally received a notice of foreclosure w a foreclosure date and frantically called BOA. When I called I was routed and rerouted all over only to be told they needed paperwork that they already had. They assured me an extension or modification would be done. I called everyday up until the day before the foreclosure and then was told it had been in the modification and delinquent payment status for over 12 months and so they couldn’t do anything but foreclose. The house was sold and I hadn’t heard anything until today when I got a letter from BOA telling me my acct was transferred to a debt collector and I owe nearly 290K. Should I begin the bankruptcy process? I have no idea if I qualify or what I need to do.

    Thank you.

    • Robert Weed

      July 6, 2011, pm31 6:04 PM
      28

      Well, it’s pretty important to try to get your qualified, since they are chasing you for $290,000. Do you live in Northern Virginia? If you do, I hope you’ll make an appointment with me. Call Vanessa at 703-335-7793.

  • Brian Torre

    July 12, 2011, pm31 8:21 PM
    29

    Robert,
    My home in Lovettsville, VA was recently foreclosed on by Bank of America. However, I have a home equity loan with PNC bank that has a balance of about $10,000. I got this loan at the time I bought the house in order to avoid paying PMI. Anyway, I am delinquent on paying PNC and am wondering if they can come after me? Your earlier posts sound like it is very common to get sued for something like this. Does settling this debt for a lesser amount sound like an option?
    Thank you so much for your input.

    • Robert Weed

      July 13, 2011, am31 6:49 AM
      30

      I think you should talk to them about settling it cheap. Their reaction will be based in part on how much money they think you have.

      You should also talk to a bankruptcy lawyer in your area, and see if you have bankruptcy eligibility. So you know what your plan B is, if PNC doesn’t want to work with you.

  • Lisa D.

    July 23, 2011, pm31 2:40 PM
    31

    Hello, Mr. Weed! Your blog is extremely informative. Have you heard of many PMI companies suing borrowers or pursuing subrogation in Virginia? I’m in an underwater mortgage with a co-borrower (who filed for Chapter 7 last week — leaving me with 100% of the responsibility now). I’ve been trying to negotiate with the mortgage company, but every time I make a little headway, they either tell me I don’t qualify or they try to see if they can file a PMI claim and the PMI company balks and says no because the loan is not past due. A representative at the PMI company told me I’d be on the hook for about $35K if the property is short sells or goes into foreclosure, plus someone in 3rd level support at Fannie Mae told me they’d pursue me for the difference between what the PMI covers and what I’d still owe. My HOA is running out of money and the buildings are just falling into a state of disrepair — values continuing to decline. The interest rate on my loan is so high, I can’t even make a dent in the principal. My condo is worth about 2/3 what I owe on it. After trying to straighten this issue out since 2008, I’m considering filing Chapter 7 now (with no credit card debt and close t0 800 credit score) to avoid issues with them in the future and move on with my life. Any thoughts?

    • Robert Weed

      July 24, 2011, am31 8:37 AM
      32

      Your post is very clear and it lays out all the reasons you need to talk to a bankruptcy lawyer. What good is your 800 credit score if you can never get out of debt? Now there may be reasons why you shouldn’t file bankruptcy, but protecting your credit score is not one of them.

      I see that you are at Virginia Tech, so you are outside of the area of Virginia I serve. Otherwise, I’d ask you to come and see me. We’d spend the time to really go over what your choices are.

  • Kathy

    July 24, 2011, pm31 9:08 PM
    33

    Dear Mr. Weed,
    Thank you for writing this timely blog. I lost my full time job in 2009 and was only able to find part time (20 hrs/wk) work. I immediately contacted my mortgage company and after a few hairy months of trying to pay the full amount, I finally gave up. At that point they said I might be eligible for the HAMP modification. I had a completed file in November of 2009 and was told I’d hear something in 30 days. Well, three or four account managers and several re-faxing of “more recent” pay stubs and bank statements later, I finally received word in December of 2010 that I *was* eligible for HAMP. I made my provisional modification payments Jan/Feb/March of 2011 as requested. I received my *FINAL MODIFICATION* papers mid-March, signed them, had them notarized and returned them, only to find out, 6 days later, that I was NO LONGER ELIGIBLE for the HAMP modification for “excessive forebearance.” (I believe it amounted to 31% and their cut off was 30%.) During this time, I was able to pay off virtually all of my other debt. I have one small credit card *AND* I will begin a new, full-time job mid-August. Here’s the rub: my property is scheduled to foreclose August 2nd, 2011. (sigh…) They want $32k to bring it current (uhm…that’d be a no) and I even had a guy knock on my door who is an investor and read the foreclosure notice (I live in a condominium complex and he’s purchased a few condos to flip and rent here already.) They have a whole, list for 60 days or 6 months (I can’t remember which) procedure, so they won’t entertain a short sell with this guy…que sera. Here’s my question. The condo, originally purchased 6 years ago for $169,900 is now assessed at $89,000. I’ll never get out from under it. I’m set to walk away and have a place to go. But if it sells at foreclosure for $50k (that’s the average for condos in foreclosure here) will I be on the hook for $119 from the IRS? Should I file for bankruptcy after the foreclosure date? Would a tax attorney tell the IRS that it’s been assessed for $89k and subtract the $50k from that leaving me on the hook for a much lesser $39k? As a teacher/divorced single mom I’d appreciate any advise you can give me. Thank you in advance…

    • Robert Weed

      July 25, 2011, am31 5:49 AM
      34

      You need to talk to a bankruptcy lawyer in your state, NOW! In about half the states, the first mortgage cannot come after you for the rest of the money–but in those states you have debt forgiveness income at the foreclosure sale. In other words, the IRS would tax you on the money that was lose at the foreclosure. (Your accountant can fight the IRS by showing you were insolvent anyway–but you’d need someone who really knew his job to do that.)

      In the other states, they can come after you for the rest of the money. Debt forgiveness income is not really a danger there. But depending on your state, your income, and your family size, you might lose bankruptcy eligibility when the condo goes to foreclosure. Usually they don’t come after you for the deficiency, even in states where they can; but that would hang over you for a long time.

      You really need to find out which risks you are facing and how big they would be. If you are not in my area, I can’t help you with that.

  • Kathy

    July 26, 2011, pm31 12:33 PM
    35

    Thanks again. I’ve made two appointments with bankruptcy attorneys here in Georgia for tomorrow to see what my risks are. I wish I was in your area, you are so kind to offer your expertise.

  • Mike

    August 8, 2011, pm31 10:33 PM
    36

    I know someone close to me who was married but only her name was on the house. They separated and so she had no choice but to foreclose the house. This is the only thing that is bad on her credit. Is the only way to make her credit back no normal to file bankruptcy? How long would it take for the credit to get back to normal after? This happened about two years ago but she still hasn’t done anything and just sitting there with a bad credit. What is your advice?

    • Robert Weed

      August 9, 2011, am31 5:39 AM
      37

      Mike, is she in Virginia? Or in some state where they cannot come after her because of the foreclosure? Does she have other good credit? Or just no other credit?

      I just don’t know enough about her specific situation to add to what I said in the blog.

  • preston

    August 9, 2011, am31 8:43 AM
    38

    Mr. Weed,

    I owned a home jointly with someone in VA. I moved to Georgia for work and they were to cover the note. This person has since deceased and my entire life has been in Georgia for years. We were making attempts at refinancing my name off the loan but were unsuccessful and now the property is in the process of foreclosure. I rent and am just comfortable here in Georgia but I have no disposable income and cannot afford the other property in VA. Should I consider bankruptcy? I cannot afford the other property but I also cannot afford them coming after me for anything. I havent seen the house in over four years, my wife and I are both considering bankruptcy as collectors are now calling daily. We’re young and want to make an informed decision that will put us on the right track as quickly as possible. Thanks for all your input in advance.

    • Robert Weed

      August 9, 2011, pm31 12:14 PM
      39

      It seems like a clear case on what you have told me. Yes, it sounds like you need to file bankruptcy. And you should probably do it before the house actually forecloses. But please talk to an experienced bankruptcy lawyer where you are in Georgia; go over your entire situation with that lawyer, and then decide what to do.

      Filing bankruptcy is not like a car wash; it’s more like surgery, and you need to understand all aspects of it very carefully before you go ahead. But it sounds ot me like you are over due to see a lawyer.

  • brandi from texas

    August 14, 2011, pm31 8:56 PM
    40

    i have BOA also and i applied for the making homes affordable program.. just found out few days ago i was denied for whatever reason and they referred my account to lawyer for the late fees ..back rent..etc of 26,000.00 i couldnt pay the rent because it was 1,400.00 a month and i am going threw divorce just one income and i was left all the credit card bills under my name.. today is 8/14/2011 they are auctioning my home on sept 4th 2011.. can they do this so quickly?? i have kids about to start school and im a nervous wreck.. i am considering filing banktrpucy because i dont know what i can do … what will happen if do file while my home is set to be aunctioned? also more imoportantly i have inheritence from my grandmother coming to me when i am 40 that i should receive i am 33 now so that is in 7 years ..if i file will that be affected.. please help .. ahhh 🙁 BRANDI FROM TEXAS

    • Robert Weed

      August 15, 2011, am31 6:57 AM
      41

      I don’t know about Texas, but in Virginia they could foreclose you that quickly. Bankruptcy would stop it and give you more time to relocate the family. But there are other issues.

      In some states, like Virginia, they can come after you for the rest of their money after the foreclosure. Some states they can’t. (I’ve heard that Texas is one where they can’t, but I don’t know.) If losing the house was the only problem, maybe you should just pack up.

      But there are still the credit cards.

      If you lose the house will you be able to pay those credit cards? If you can, maybe you want to avoid bankruptcy. If you can’t, then bankruptcy looks better.

      What happens to the money from your grandmother depends on exactly what the will and trust say, and again Texas law controls that.

      Finally, you say you were denied for the loan mod “for whatever reason.” You need to look into it more. (Now, they don’t tell you much.) Sometimes they will deny the loan mod because you are making too much. That doesn’t sound like you. Sometimes because you are making too little. (Can you rent a room?) Sometimes because you are making too little to afford both the house and the credit cards. Then if you filed bankruptcy and got rid of the cards, they might approve the loan mod.

      All those things need to be considered to help you to decide if filing bankruptcy is right for you.

      You definitely need to talk to a bankruptcy lawyer in Texas.

  • Amy

    August 24, 2011, am31 6:45 AM
    42

    Hello, I am in a real bind. It’s been a few years now and the house is up for auction. We attempted to do a short sale, but the banks refused and refused again, even when the bank that ended up getting the second mortgage tried to persuade the first one to take the offer, which was nearly the price we had originally paid for the house. Now it is going at auction for a fraction of the original sale.

    My now-ex husband’s name was not on the lease, and he has washed his hands of the entire situation since we initially lost the house. So it is only my credit that is affected, but I can’t even afford the fees to pay a lawyer for bankruptcy. In addition, I now live overseas, and I am not sure how to proceed from this point on. I really want to file bankruptcy, but I am not sure how to do it in this situation. Any advice would really be helpful. Thank you.

    • Robert Weed

      August 24, 2011, pm31 2:48 PM
      43

      If you can’t afford a lawyer and live overseas I’m not sure this is a problem for you. People file bankruptcy for three reasons; so the creditors stop calling you; so they can’t garnish you, and to get back to good credit.

      If you are living overseas, they probably are not calling you; it is hard to know how they can garnish you; and you probably don’t need good credit. When you plan to come back to America, that would be a good time to talk to a bankruptcy lawyer about filing bankruptcy on all this.

  • Nenad

    August 26, 2011, pm31 8:58 PM
    44

    Hello Mr. Weed,

    I live in CA and have not been paying for my house for 33 months because my loan has been in process of remodification. This morning the house was sold (forecloused) because the loan was not remodified. I am wondering if the bank, BOA, will sue me for the money that I didn’t pay while I was living in the house for 33 months?Also, I have 2 loans: one for $400000 and another for $100000. Do you believe that bankrupcy is the only way out at this point?

    Regards

    Nenad

    • Robert Weed

      August 27, 2011, am31 9:37 AM
      45

      What I’ve heard is that in California they cannot come after you for the first mortgage but they can for the second. I’m a bankruptcy lawyer in Virginia, though, so I don’t know.

      As to whether you should file bankruptcy, a good lawyer would want to know a lot about you before deciding that. Will the second offer you a settlement? Have you been saving cash while you lived for free? Those are just some of the things you need to talk about with your lawyer.

      I wonder why you didn’t file bankruptcy before the foreclosure. Usually, not always, eligibility is better before the bankruptcy. It may be you got turned down for the mod because your other debts were so high; and if they had been cleaned up by the bankruptcy, maybe the mod would have been approved.

      A good lawyer needs to go over your complete picture to decide what’s the smart thing to do.

  • Dave in Virginia

    August 31, 2011, pm31 4:57 PM
    46

    Hello

    Great counsel……

    I live in Tidewater ….am I in your territory?

    Dave

    • Robert Weed

      August 31, 2011, pm31 5:13 PM
      47

      Sorry, no. North of Fredericksburg VA is the area where I do bankruptcy law.

  • Nenad

    September 3, 2011, pm30 7:30 PM
    48

    I spoke to a lawyer and she told me that bankruptcy is not needed because the second mortage company has not contacted me the whole time that I have been in process of foreclousure. If they serve me then I will file for bankruptcy. Also, I have no debt of any sort. Thank you for your replies.

  • Nenad

    September 3, 2011, pm30 7:30 PM
    49

    I spoke to a lawyer and she told me that bankruptcy is not needed because the second mortage company has not contacted me the whole time that I have been in process of foreclousure. If they serve me then I will file for bankruptcy. Also, I have no debt of any sort. Thank you for your replies.

  • DC lady

    September 4, 2011, am30 3:09 AM
    50

    Hi. I was wondering if there is a certain amout of time by which a lender foreclosing on a DC property must sue for a deficiency? Also do you have any recommendations for a DC foreclosure/bankruptcy lawyer?

    • Robert Weed

      September 4, 2011, am30 11:35 AM
      51

      Sorry I don’t know anything about DC law. For bankruptcy lawyers in DC, I’m familiar with Ammerman and Goldberg, because they also work in Virginia and do a good job here.

  • Soleda Bustillo

    October 15, 2011, pm31 3:41 PM
    52

    My husband and I went for foreclosure almost three years ago. The problem that we are facing now is that a company named Real Time Solution is after us claiming almost 51, 000 dollar for sale deficiency on our previous house. I don’t know what to do. Now we been saving to buy a new house, but I; not sure if any bank will works with us. We are in the state of Rhode Island. Can you please give us some advice in what to do. Thanks in advance.

    • Robert Weed

      October 15, 2011, pm31 3:50 PM
      53

      You probably should have talked to a bankruptcy lawyer when you knew the house was going to foreclosure. If you had been able to file bankruptcy then, you’d be eligible to buy soon: three years after the bankruptcy and three years after the foreclosure. If you end up filing bankruptcy now, you push your eligibility to buy three more years down the road. Plus, the bankruptcy court (depending on your state laws) may grab the money you’ve been saving for the down payment. (Ouch!). But probably no one will give you a mortgage if Real Time is still chasing you. So you are in a tight spot.

      You should go talk to a bankruptcy lawyer who knows your state now. And maybe you want to see if you can settle up with Real Time.

  • Shawnda B

    October 27, 2011, am31 11:35 AM
    54

    My house has been on the market for 9 months. It is getting increasely difficult to keep up with the morgage payments on a property that no one is residing in. How bad is it to have a forclosure on your record?

    • Robert Weed

      October 27, 2011, am31 11:42 AM
      55

      I need to know more? Have you already filed bankruptcy?

  • Steven

    October 28, 2011, pm31 6:00 PM
    56

    Has anyone heard more about SRG and fannie mae on collecting on first morgages
    state of virginia. it seem unfair after what the banks have put us though

  • michele

    November 1, 2011, am30 1:04 AM
    57

    I have been unemployed since March of 2011, I am struggling to pay my monthly mortgage payments. I also am not eligible to file bankruptcy until June of 2013. My question is…Can I go into foreclosure and and when June of 2013 rolls around, file for bankruptcy then? I thought about short selling the house, but it is upside down and I don’t want to be stuck owing the Bank the difference between what I sell for and what is owed. Thanks for your advice.

    • Robert Weed

      November 1, 2011, am30 6:45 AM
      58

      That’s why a good lawyer is really important. All kinds of things could happen between now and June 2013 that might make you eligible or not. A real strategy to keep you eligible, and help you out run your problems over a year and a half–you need all that. What kind of work do you do; what’s your income when you are working? Your lawyer needs to know you complete picture to figure out the best way to do it. Are there kids? How do you feel about the school district? Are there two of you on this house, or just you? And what state you are in is really important. In some places you might not even be foreclosed before June 2013. All that and more has to be taken into consideration to answer what seems like a simple question.

  • luke

    November 16, 2011, pm30 5:15 PM
    59

    what happens if my forclosed home sells for more than i owed on the home and i free and clear am i owed any moneys

    • Robert Weed

      November 16, 2011, pm30 6:29 PM
      60

      I’ve only had that happen once. But yes, if it sells for more than you owe on it, the rest of the money comes to you.

  • HShoes

    November 23, 2011, pm30 9:21 PM
    61

    I am going through the foreclosure process. My last payment was in May 2011. I am in AZ, and just got a letter stating that my house will be up for auction on Dec. 19. We are walking away from this home, but are now wondering if we should file Ch. 13? I have been researching online, and from what I have gathered…our “reduced” payments, are saving us around $300 per month (hardly worth it for me.) So for now, I am just making the minimum payments (all we can afford at the moment), so we can keep our credit cards open, since we have no savings. Am I not understanding the process? Should I wait until the bank sues me for the difficiency on the foreclosed home? Luckily we have family that have offered up thier home, once we are evicted (have no idea when.)…while we fix up another home we own. Which brings me to my final question. Are we in danger of losing our 2nd home because of the difficiency? Highly stressed, and trying my best. Thank you for any suggestions.

    • Robert Weed

      November 24, 2011, am30 7:56 AM
      62

      You need to see a bankruptcy lawyer in Arizona. That’s an hour long discussion with someone who has all the facts in front of them.

  • Angie

    December 5, 2011, pm31 12:58 PM
    63

    I had a rural development loan in Maryland. They forclosed and the house was apparently auctioned off over a year ago. This weekend I get a letter in the mail from USDA saying I owe them 200K which Icould never pay. Also the my credit is already wrecked due to an illness and loss of income during the foreclosure process. Will filing bankruptcy help me

    • Robert Weed

      December 5, 2011, pm31 2:39 PM
      64

      The purpose of bankruptcy is to help people in a situation like yours. Maybe with more details there’s some reason why you can’t, but it sounds like bankruptcy is exactly what you need. I don’t know where you are in Marylnad, but one lawyer to recommend there is Tanya Kripetz at (301) 474-1900.

  • carlos

    December 7, 2011, am31 12:24 AM
    65

    Hello I filled bankruptcy on aug 2011 chapter 13 my house is getting foreclosed on january 2012 I left the house because of abuse my discharge from bankruptcy would be in about 2 years with re established credit how long it would taketo get financing for a new home

    • Robert Weed

      December 7, 2011, am31 6:14 AM
      66

      I don’t know why you are in Chapter 13. Don’t know enough about your situation to make sense of it.

  • Dessirae M

    December 8, 2011, am31 11:07 AM
    67

    I foreclosed on my home in 2009 in VA with a 1st and 2nd. I just received a letter in the mail from RCS(Recovery Services) stating I have a debt of $80,000. I talked to someone in their office and they tried to negotiate an amount of $24,00 to be paid if I set up something now. I am guessing this is from my 2nd mortgage. I was unaware I would be held liable for any amount once I foreclosed because this information was never told to me nor at the court proceeding. Is filing bankruptcy an option for me? I am a stay at home with very little assets. Some in a 401k and in a CD. I dont’ want to lose that as that is all I have to my name. Can you please give me some advice? Is there any way I can be forgiven for this debt?Is that an option for me? My credit is already messed up, although I have been trying my best to make it better. Please any help you can offer would be greatly appreciated.

    • Robert Weed

      December 8, 2011, am31 11:30 AM
      68

      Based on what you have said, it looks like filing bankruptcy is the obvious and best solution to your problem. The 401k is safe–need to know how much you have in the CD. Clear up your debt and get you on the road back to good credit. Your lawyer will want complete details so there’s no issue that’s being overlooked. You definitely need to talk to a bankruptcy lawyer and bankruptcy is likely to be a easy and simple solution to your problem.

  • Rick B.

    January 3, 2012, pm31 5:41 PM
    69

    I am in Virginia. I no longer want the house anymore and am prepared to walk away. Only a primary mortgage with navy fed. I recently recieved a letter from navy feds law firm stating my loan has been referred to them for forclosure. I already closed all accounts and credit cards with navy fed. I am not interested in financing a home EVER again but I do want to keep the 10 thousand dollars that I saved up from not paying the mortage and use it toward purchasing a very small simple home for CASH. I will buy a shack for cash in about 3 years after I save some more money. No kids, No wife, and I dont need much to be happy. If I file bankruptcy can I keep this cash? Or should I wait to file after I purchased my simple dwelling? Or do I even need to file bankruptcy at all considering I do not want or will never need to use credit again. Respectfully I ask for your honest advice.

    • Robert Weed

      January 3, 2012, pm31 5:44 PM
      70

      No, you can’t keep the cash; and no, if you bought a place, you couldn’t keep that either. Are you in Northern Virginia? I’d like to meet with you and pick out what we agree is the best way to handle this so you don’t lose anything. That’s what lawyers are for.

  • mary sue

    January 18, 2012, pm31 6:18 PM
    71

    hello,

    I am about to walk away from my house. I am currently three months late. My question is how long can i wait to file chapter 7 bankruptcy? I am in serious debt and i work two jobs…working two jobs can not bring my account current. i decide to foreclose my house in NC. I would like to know when can i file bankruptcy. Do i need to wait til the foreclosure process begins?

    • Robert Weed

      January 18, 2012, pm31 6:21 PM
      72

      You need to talk to a lawyer. You can file BK either before or after the foreclosure, but depending on the details of your situation, one or the other might be a whole lot better for you. Or it might not matter at all. But you should talk to a lawyer now and go over your whole situation in detail to work out the best plan.

  • Tiffani

    January 24, 2012, am31 11:55 AM
    73

    Our situation is as follows: I am a stay at home mom, my husband is going on 4 months of unemployment and prior to that work was very slow. We have used a significant amount of our credit to stay a float. We are current on all our bills and mortgage but money will run out soon. We have been looking into a modification or refinance(we have an 80/20) , but with $1600 more going out a month than coming in that is not an option that we would be able to entertain or is bankruptcy the answer? We will be filing taxes soon and should receive about $8,000-we do not want to spend all that on the house just to possibly lose it in a couple of months. The tax return money?, can it be taken?-if in cash, out of bank? We have only one vehicle, paid off but worth 6500.00 can that be taken?

    • Robert Weed

      January 24, 2012, pm31 12:10 PM
      74

      You need to talk to a bankruptcy lawyer who will take the time to go over all your choices; and who knows about the laws in your state.

  • Tiffani

    January 24, 2012, pm31 12:11 PM
    75

    We are in Virginia.

  • Sandy

    February 16, 2012, pm29 11:19 PM
    76

    My friend lives in the sate of IL and is letting his house is go into forclosure. He contacted a bankruptcy attorney and was told that his mortgage company could not sue him for the difficiency after it is sold, and did not have to file bankruptcy unless he wanted to get rid of his credit card debt . Now I am hearing the comments about fannie mae and other companys collecting on mortgages. He told him it would take two to three year to sell the house and he should just stay there rent free and save his money. Who should he beleive or should he file bankruptcy now?

    • Robert Weed

      February 17, 2012, am29 11:48 AM
      77

      Sandy: Whether they can collect depends on state law. I’m in Virginia so probably the Illinois lawyer knows more about Illinois law than I do.

  • John

    February 18, 2012, am29 9:42 AM
    78

    I live in Florida and I accrued about $100,000 in credit card debt and have n0t been able to pay any payments on them. I also had a foreclosure from one of my properties in 2010. I now have a judgement against me for $7000 from one of the credit card companies. I am about to lose another property on March 2, 2012 to foreclosure. I am wondering if I should file bankruptcy before the final judgment on this house to avoid the forclosure on my credit report and have just the bankruptcy. I make $40,000 a year and have a family of six. What is my best option.

    • Robert Weed

      February 19, 2012, am29 11:26 AM
      79

      John:

      You are as clear a case for filing bankruptcy as I ever see. Now you need to talk to a lawyer there in Florida to make sure there’s not some other factor. But from this distance it really looks like you should take care of this. You want to get back to good credit someday, and you are never going to get there without doing a bankruptcy.

  • Susan Miller

    February 21, 2012, pm29 12:33 PM
    80

    My ex husband and I divorced over two years ago. He kept the house which we had a first and a second. He had responsibility to pay per divorce decree. He has since filed bankruptcy and has stopped paying the mortgage. The second has since obtained a judgement on me (as he is protected) and the house now has a sale date. Should I file bankruptcy now or should I wait to file after the sale date?

    • Robert Weed

      February 21, 2012, pm29 1:51 PM
      81

      You definitely need to talk to a lawyer before the sale date. Under certain circumstances, waiting until after the sale would mean you lose your eligibility. (If your income is too high.) You really don’t want that. Also, waiting may mean that you start getting garnished by that second mortgage. You probably don’t want that either.

      On the other hand, there may be reasons you need to wait. Maybe your tax refund is too big and the bankruptcy court would take it. If there’s a home owner association, that could affect your timing. So I can’t say for sure whether now or later is better without having all your facts.

      But you need to decide whether now or later is better–and decide that NOW. So now is the time to go talk to a lawyer.

  • Lee

    February 21, 2012, pm29 10:09 PM
    82

    I live in MN. I just got a letter from some “ATTORNEYS AT LAW” saying that their office has been retained by the RCS Recovery Services to commence a collection action against me for $34,ooo. Unless they have the wrong guy, my properties went to forclosure in 2007. I am in the process of buying a a house. I have been pre approved for a loan, but I’m worried that when I do buy a house that everything will go downhill if they do come after me. Is this just a scare? The letter says that I have 30 days to respond. What should I do?

    • Robert Weed

      February 22, 2012, pm29 2:21 PM
      83

      Lee:

      Well foreclosure does not mean that you don’t still owe the money. In some states you do, and in some you don’t. Here in Virginia I would tell you that yes you do owe that money and you have a big problem. I don’t know what the law is where you are.

  • Natalie

    February 22, 2012, am29 12:26 AM
    84

    I am in the state of CA. I am the co-borrower & my mother, the borrower. Our house is currently in foreclosure & have no desire to keep the house. I’ve been unemployed since 11/2010 but am receiving UI. My mother also unemployed but getting paid pension. My only debt is this house. My mother has a list of debts. Would I qualify to file bankruptcy chapter 7?

    • Robert Weed

      February 22, 2012, pm29 2:22 PM
      85

      I’d want to know more to be sure, up it definitely sounds like you are eligible.

  • PG

    February 22, 2012, am29 12:46 AM
    86

    I own 2 properties, on my primary recidence i have a 1st and 2nd (which are current) and on my 2nd property which is in forclosure i only have 1 loan; my question is: can i file bankrupcy on my 2nd property and include my 2nd loan of my primary recidence?

    • Robert Weed

      February 22, 2012, pm29 2:27 PM
      87

      PG: Most people see it like you do, but you don’t file bankruptcy “on” this or “on” that. You just file bankruptcy.

      The question is, what happens when you do. When you file bankruptcy, you can stop paying the mortgage on the rental property and give it back to the bank and owe them nothing. You can keep up the payments and keep the house you live in. What happens with your second mortgage? I have a blog on that, here.

      https://robertweed.com/blog/chapter-7-bankruptcy/after-bankruptcy-what-if-i-dont-pay-my-second-mortgage/

  • Sydney Schmitter

    February 24, 2012, pm29 1:49 PM
    88

    hi. We had two homes we owned (thinking the first was sold mortgage broker talked us into closing on second home before the closing of our home we were selling. Our home sale fell through and we were left with two homes. Totaling payments of about $5000 per month in mortgages. We carried this for a year before the economy dived and we decided we could not keep the second home with its sub prime mortgage and we moved back to our older home and tried to negotiate with the bank to keep it and modify. Long story short…we were deceived by that bank and they forclosed on us while we were working out terms with them. We now have two forclosures and are pretty sure this issue we have no pertains to the home with the adjustable mortgage that was a more expensive home.

    Today we got a notice from the Department of Agriculture, Dept managment services, Department of treasury and they are trying to garnish wages for $190,000 for what they say is for a “home forclosure” but they will not give us any other information. The man on the phone said he has no other information for us. We are absolutely stumped as to what this is. Both homes had mortgages with regular companies and were not hud or fannie may loans. Have you ever heard of this??? We are in Michigan and know we need to file bankruptcy asap.

    If you have any info for us could you please tell us what you might know about this? We certainly do not have this kind of money…or we wouldnt of lost our homes!!! We are a family with four children at home and them taking any money from my husbands paychecks will result in us not being able to pay our rent or utilities.

    • Robert Weed

      February 24, 2012, pm29 5:36 PM
      89

      That looks like a rural development loan–I don’t see many of them where I am–Washington suburbs–but that’s what it sounds like.

      Don’t know why you were putting off seeing a bankruptcy lawyer, but you need to do it now. The whole purpose of bankruptcy is that the country is better off, you too, of course, if you have money to feed your children. That’s why it’s in the law. That’s why you should have done it two years ago; that’s why you need to see a lawyer on Monday.

  • Renee

    February 28, 2012, pm29 8:33 PM
    90

    hi, my husband and i have been struggling for a few years due to job loss. Our home is in forclosure and i have enough money to make it current but bank want take it because i dont have the 2400.00 attorney fee. I also have a rental property that is vacant i am tryimg to sell, behind on these payments also. Should i consider bankruptcy also.

    • Robert Weed

      February 28, 2012, pm29 8:40 PM
      91

      You should talk to a bankruptcy lawyer and see what your options are.

  • William Vu

    March 1, 2012, pm31 7:29 PM
    92

    Hi. I bought a vacant school building in OK about 5 years ago with an intent to repair and use for an education center. I formed a LLC to put the building on its name, but when applied for a loan the bank required me to sign as a loan grantor, and I have signed. However, things did not turn out as I wanted. I went through a divorce a year after the purchase of the building. Then I could not find partners who would be willing to invest in the venture with me, partly because there is a asbestos in the building and the cost of removing it is prohibitive, and partly because the building further deteriorated during the years due to vandalism. The neighborhood is so bad, some thefts went in and removed all copper pipes and electric wires from the building, and they often dumped trash at the school site so that I had to pay for clean-up from time to time (otherwise the city threatens to bring me to court).
    I want to get rid of the building as soon as possible, so I stopped payments on the loan about two months ago and now I consider filing Chapter 13. Is this the right thing for me to do? I also own another house in which I live, and held a mortgage on this house with another mortgage company. Can the lender of the school building put a lien on my house? I suppose that the school building will be auctioned. What happens if no one will buy it at the auction and the lender refuses to take the building, too? I don’t want to own it because I don’t want to continue to clean and mow and I don’t want any problems with the city. Please give me your advice. Thank you.

    • Robert Weed

      March 1, 2012, pm31 7:45 PM
      93

      Wow that’s a complicated situation, with zoning, and maybe hazardous waste issues on top of the bankruptcy. If you were here in Virginia, I’d tell you that I’m not qualified to help you and I’d suggest some (much) higher priced lawyers who might be.

      My only comment, as a bankruptcy lawyer, is I don’t know why you think you want or need Chapter 13, although you might. This could be a Chapter 11, could be a Chapter 7. Your lawyer will need to know a lot more to even make that decision. You definitely need to talk to a bankruptcy lawyer. But probably one who knows about, or who has access to someone who knows about the more complicated stuff that will come up when you try to get rid of the building. Neither the mortgage lender nor the bankruptcy court will necessarily take it off your hands. (Maybe they will. Maybe??) Bankruptcy gets rid of your debts, but it doesn’t get rid of all your problems. And a vandalized, deteriorating old school building could be a bigger problem than just the debts you have.

  • Donny

    March 4, 2012, am31 8:28 AM
    94

    I am in a chapter 13 plan and have surrendered my home. It is currently in the foreclosure process but has not gone to auction. My problem is I’m trying to rent a house and the owner wants to make sure I’m not going to get hit with a deficiency after the sale. Since the home was surrendered in my plan, am I protected?

    • Robert Weed

      March 4, 2012, am31 8:42 AM
      95

      Well, if your home was surrendered in your plan, then any deficiency is covered by the plan. But it is very strange to me why someone would be in Chapter 13 and be surrendering their home. I do see it now and then, but … What your plan is doing is hard for me to understand (without seeing all of it.) If you new landlord wants reassurance, why can’t your current lawyer write a letter. He should understand what your plan is doing. I don’t.

  • Donny

    March 4, 2012, am31 8:55 AM
    96

    I filed a chapter 13 and kept my home for about a year and a half after. I was relieved of the credit cards but I was in an ARM and payments kept going up until I just couldnt keep up. I asked about converting to a 7, but my lawyer told me i would loose my vehicles. Hence, I stayed with the plan and surrendered the home.

  • Maggie

    March 12, 2012, pm31 3:17 PM
    97

    we foreclosed on our home in Virginia in 2009 and received a 1099-c from the mortgage company. in January 2010. we started receiving very harassing phone calls and letters from strategic recovery group (none sent certified mail or even signed). today we received a final demand wanting us to pay them almost $124,000. the weird thing is when i brought up the 1099c to them they said it doesn’t matter because it’s fannie mae not nationstar (the mortgage company) and that if we don’t pay they will garnish my husband paychecks. another weird thing is they are only going after my husband not me and both of our names were on the loan. i’m not sure what to do now. any advice? we currently live in georgia

    • Robert Weed

      March 13, 2012, am31 6:52 AM
      98

      Maggie: I checked with some of my friends on this, and didn’t like what I found out. My view (and probably yours) is when they send the 1099-C they are out of luck. (The legal term is “estopped.” They are stopped form claiming you still owe them the money.) A 1099-C is a debt cancellation–so it should mean the debt is cancelled. But I’ve talked to some other lawyers who have fought that in court and lost. Ouch!

      The debt collector (or fannie mae) can go to a judge and say, the 1099-c was a mistake–they meant to send you a 1099-a. (I talk about those 1099’s here. https://robertweed.com/blog/general-bankruptcy-law/bankruptcy-foreclosure-1099-a-and-1099-c/.) And tell the judge under Virginia law you really still owe the money. (Under Virginia law you do still really owe the money–unless they are “estopped” by the 1099-c.)

      Some judges will go against you on that. Do you want that hanging over you? The safe thing to do is talk to a bankruptcy lawyer in GA about filing bankruptcy and getting this out of your life.

  • Michael Chomick

    March 19, 2012, pm31 1:38 PM
    99

    Dear Mr. Robert Weed,

    I am considering filing for Chapter 7 Bankruptcy protection. My question is should I do it before the foreclosure goes through or wait until the judgement has been rendered.

    The property is a residential house in Florida, and I reside on the other coast. The value of the property has been declining rapidly and the balance owed is much more than the market value, so I decided that I could not afford the mortgage payment, and walked away. The Bank decided to foreclose, so as stated earlier, should I file now for Chapter 7 or wait until the outcome of foreclosure. I have not desire to keep this property and would like to be rid of this financial liability due to the fact that at the end of this year I have to start payments on my daughter’s student loan, which will take me many years to pay back.
    Thank you for any advice that you may have for me.
    Sincerely, Michael Chomick

    • Robert Weed

      March 20, 2012, am31 10:32 AM
      100

      Michael: When to file can be a complicated planning issue. Some people lose income eligibility if they wait until after the house is foreclosed. So that’s the first thing you and your lawyer need to look it. If there’s no problem with that, then your next issue is how soon will the bank foreclose? Are there HOA issues, or zoning that mean you want the bank to foreclose as soon as possible. Filing bankruptcy often slows down the foreclosure, and you may not want that. That could be a reason to wait until after the foreclosure.

      After those two issues, then when to file might turn on other facts in your case–do you have too much money that you need to spend down? Will the child support that would go away and cause you to lose eligibility that way. The complete picture of our finances determines the best time. But the signle most important thing is whether you’d lose eligibility if you want until after there’s a foreclosure.

  • Thomas

    March 21, 2012, pm31 8:22 PM
    101

    I have the same exact situation as Maggie above, however, I have a 1099A AND 1099c forms. I have had a company called Strategic Recovery Group calling me a few times a week and sending letters about once a month since February 2011. They tell me that it doesn’t matter that I have everything that says I am clear of the debt and that it doesn’t matter that I didn’t have to declare the foreclosure as an income since ALL the debt was canceled.

    I have called up Fannie Mae and they have a record of selling off/sending information to SRG but have no records as to WHY.

    Do I have to declare bankruptcy just to get these jerks to stop calling me?

    • Robert Weed

      March 22, 2012, am31 6:38 AM
      102

      Thomas:

      SRG is a debt collector. A debt collector has to stop calling you if you tell them IN WRITING :I refuse to pay.” So send them a certified letter saying “I do not owe you any money and I refuse to pay.” Send it certified–and keep a copy.

      What happens after that? Well, maybe nothing. Maybe somebody sues you. So you definitely need to talk to a bankruptcy lawyer and check your eligibility to file bankruptcy. You need to see if you can file–if you need to get ready to file–so if you do get sued and your “they cancelled the debt” defense doesn’t work.

      Good luck.

  • Cynthia

    November 26, 2012, pm30 9:23 PM
    103

    Mr. Weed,
    I am in Chapter 13 in Texas due to my mortgage company filed a foreclosure on my house after they placed me in a forbearance for 90 days, yet I paid it for 9 months as I was told.

    I recently was had a car accident that totaled my car where I was struck from the rear at a stop light. My question is will I be able to get a car. If so, are there any stipulations.

    Secondly, when my mortgage company gives me a modification, can I petition to be dismissed from Chapter 13?

    • Robert Weed

      November 27, 2012, am30 6:04 AM
      104

      Cynthia:

      Needing to buy a car while in Chapter 13 is a big problem that comes up all the time. Around here, and most places I know of, the court requires that you get their approval for financing, so you have to do that.

      Second, you need someone to lend you money at a decent rate and that can be hard. Shop around. One more possible lender. 722Redemption Funding, a outfit that lends money to people right out of Chapter 7 bankruptcy for cars, is starting a chapter 13 program. It’s not on their website, but if you contact them, you can find out where that is. http://www.722redemption.com/home.php?gclid=CIiVicL_7rMCFahQOgodkhgAFQ.

      If you get a loan mod, then can you get out of chapter 13? The law says you can drop out of chapter 13 at any time. Good luck!

  • Emad william

    December 13, 2012, pm31 7:23 PM
    105

    I file bankruptcy on 07/2010. the bank foreclosed my house on 08/2012. now the assosiation ask for thier mony form 07/2010 to 08/2012. My question is who should pay the association fee me or the bank?
    Now forecloser on 08/2012. Is that mean i will not be able to buy a house untill 08/2015 (3 years after forecloser) even with FHA.

  • Dan

    January 2, 2013, am31 9:57 AM
    107

    Mr. Weed,

    Several years ago I bought a house in Indiana using GMAC with an FHA mortgage and two years later decided to join the military. We aggresively tried to sell the house but were unsuccessful. We tried our best to keep up but eventually fell behind. Because I am in the military they are not able to forclose until I sign a waiver from the Servicemembers Civil Relief Act. We have signed that and are now just playing the waiting game with GMAC.

    My wife and I have very good credit so my question is what can we expect credit wise and will we have to file bankruptcy.

    • Robert Weed

      January 2, 2013, pm31 4:06 PM
      108

      Dan:

      I’m not sure how you can have good credit if you mortgage is showing is showing six months late or foreclosed on your credit.

      In some (“non-recourse”) states they cannot sue you after the foreclosure–and in some states they can but rarely do. (Virginia is in that category.) You need to talk to a lawyer in your area who would have better info on what to expect.

      Don’t know whether you need to file bankruptcy. But I can’t see any way you get through this with “good credit.”

  • Ricky

    January 3, 2013, pm31 4:34 PM
    109

    I was discharged from chapter 7 last year. I’ve been current on my mortgage ever since. Now due to an accident I will not be able to work for quite some time,enough that I will no longer be able to make the payments. If I stay until they foreclose, and it takes a year or so, will my credit be hit at that time by the foreclosure? I’m wondering if a deed in Leu will help my credit get on track faster if I do that sooner than later? Or, is it to my benefit to wait it out until the foreclosure threats come and then offer a deed in leu to the bank? I’m not against trying a short sale, but I have a second mortgage. Although, I didn’t reaffirm on either mortgage. Help me clear up my options in my head…

    • Robert Weed

      January 3, 2013, pm31 4:55 PM
      110

      Ricky:

      It depends on what you mean by “credit.” Usually that means your credit report and your credit score. Your credit score is based on your credit report and your credit report should show bankruptcy on the mortgage in 2012 and nothing after that. Not showing if you pay, not showing if you don’t pay. So getting things like a car loan is unaffected by how long you stay after you stop paying.

      BUT there are regulations about how soon you can get a mortgage again. And those regulations are three years after a foreclsoure and two years after a short sale. Not figured from the credit report, which should only show bankruptcy–not foreclsoure. But figured form the land records. So you can live for free longer, usually, if you just wait for them to foreclose. But you can buy again sooner, usually, if you work on trying to get a shortsale.

  • Gabrielle

    February 11, 2013, pm28 1:13 PM
    111

    My divorce decree only states that my ex is responsible for the mortage and he has to refi to get my name off of the mortgage. I, the wife, the should not be effected if he misses payments. There is also a Bankruptcy section in the divorce decree that states neither party shall be able to discharge any finianical responsibles or obligations agreed upon in divorce decree thru Bankruptcy, whether it is ailmony or support, or if it is not than it still can not be dischargeable in Bankruptcy. I am on the mortgage but not the deed. Ex is so behind in payments, there 2 mortgages on the house, that mortgage company has filed a judgement and placed the house on foreclosure. I fear that ex will file Chapter 7 and every falls on me. Before he files for Chapter 7 can my lawyer utilize the hold harmless clause in the Bankruptcy section and if he has to file for Bankruptcy he would have to file Chapter 13 which would still hold him liable for some sort of payment? If so, can he use Chapter 13 to then dissolve the hold harmless clause in the Divorce Decree?

    • Robert Weed

      February 11, 2013, pm28 2:00 PM
      112

      Gabrielle:

      I’m a bankruptcy lawyer–and don’t do divorces. So I don’t understand what divorce lawyers tell people like you about what the chances are that those provisions in the divorce actually help you.

      They do give you a stick to hurt your ex husband with, since he’s not living up to his agreement. BUT that’s not going to help you much when the mortgage company comes after you.

      From a bankruptcy lawyer view, both of you should have filed bankruptcy along with the divorce, so this stupid mortgage loan doesn’t keep you linked together and reopen old wounds. I know that divorce lawyers see it differently, like I say, I’m a bankruptcy lawyer.

      (You are right that I have dodged your what-to-do question. Go back to your divorce lawyer, and have him pull in a bankruptcy lawyer if necessary. You put this into the divorce agreement because you were afraid your ex wouldn’t pay. Well, he’s not paying. Now what? I’m not going to tell you what your next steps should be, because I think you ought to ask that first to the lawyer who put you on this road.)

  • Emily

    February 25, 2013, pm28 7:08 PM
    113

    I received a letter from Strategic Recovery Group saying the proceeds from the foreclosure sale did not satisfy the entire amount owed and that a deficiency balance remains due. My first mortgage was through Green Tree. Does this mean that the “deficiency balance” is all that I have left owed for my first mortgage?

    • Robert Weed

      February 25, 2013, pm28 7:15 PM
      114

      Emily:

      Yes, that what that says to me. Was there a second? You’d owe the whole second.

      Here in Virginia they rarely come after people for the first, but they can. It may be different where you are. In some states they CANNOT come after you–you need to know the law where you are.

  • Emily

    February 25, 2013, pm28 7:20 PM
    115

    Thank you for your quick response! I did have a 2nd but haven’t heard anything from them yet (BB&T). Located in VA. Is the deficiency balance something that can be set up in payment plans or generally due in one lump sum? Thanks again!

  • Al

    March 14, 2013, pm31 10:01 PM
    116

    Mr. Weed,

    I previously filed BK 7 in 2010. Had a rental and primary home (both in VA) go into foreclosure in January-February of this year. Both homes had a 1st and 2nd mortgage on them. I purchased a new home prior to them being foreclosed, and live there now. I received a call from an attorney’s office today trying to collect for the 2nd mortgage lender on my previous primary mortgage. Am I still obligated, or does my previous BK 7 protect me from being sued? Do I get to try to fight it in court? What is my best method to protect myself? I have no other big assets except 401k & IRA’s, and 1 car paid off. My wife is on all deeds and debts with me, but did not file BK 7 with me in 2010. Your help and response is greatly appreciated.

    • Robert Weed

      March 15, 2013, pm31 12:00 PM
      117

      Al:

      The 2010 bankruptcy protects you from that 2012 foreclosure, as long as you owned that property in 2010, which you must have. And as long as you didn’t reaffirm the debt, which would have been fantastically stupid.

      That “attorney” is almost certainly a debt collector. Pretending to be an attorney is probably a violation of the FDCPA–Fair Debt Collection Practices Act.

      If they called for you and not the wife (why did you leave her off is she’s on all debts with you???), trying to collect a discharged debt is a violation of the FDCPA and also a violation of the bankruptcy discharge.

      So, you should talk to a consumer lawyer about going after that debt collector. Look here. http://naca.net/

      And you need to talk to a bankruptcy lawyer about why you left your wife off of the 2010 bankruptcy and does she–very likely–need to file now.

  • Liz

    March 19, 2013, pm31 2:47 PM
    118

    Hello Mr. Weed,

    First, thank you for hosting this blog. It’s been very educational and I love how you respond to all of the questions posted by others.

    That being said, here’s mine. Unfortunately, the home in question has Chinese Drywall. It is toxic and unlivable. The bank is attempting to foreclose right now. I’m told that they will not release me from a deficiency judgement and I won’t know unless I attempt a short sale and even then I wouldn’t know until the closing date.

    We’ve already purchased another home under my spouse’s name (this foreclosing property is only under my name), so I’m not as concerned about my credit being affected, though I am concerned about the bank possibly coming after me for the deficiency.

    In your opinion, since I don’t particularly care about the credit hit, should I just let this foreclose and wait the requisite time for them to pursue a deficiency and then just file bankruptcy? Or should I try to play the bank’s game on a short sale with the big gamble that they may or may not release me from a deficiency (plus they may even ask for a seller’s contribution which I’m just not willing to give)?

    Thoughts?

    Thank you so much again!

    • Robert Weed

      March 19, 2013, pm31 3:03 PM
      119

      Liz:

      Well one issue is, are you eligible to file bankruptcy? If your family income might have eligibility problems, then you need to do the short sale or file bankruptcy BEFORE the foreclosure (since the empty property helps your eligibility.)

      Around here the first mortgage rarely come after people for deficiencies; the second almost always do. So if you only have a first, you might not need to file bankruptcy at all–although you’d get back to good credit quicker if you do.

      How good is your health insurance? How is your health. If you can get out of the obligation with a short sale you don’t use up your bankruptcy eligibility, that you might need, for example, for a surprise medical condition.

      So, on balance, if it’s not too much trouble, I lean toward cooperating with the short sale. But it’s a close call that could go either way.

  • Amy

    March 27, 2013, pm31 4:51 PM
    120

    Hello Mr. Weed:

    Thank you for taking the time to answer people’s questions. It can be very confusing and frustrating trying to get pointed in the right direction without paying a fortune. I am glad to see someone very knpwledgable cares about those searching for answers.

    My question to you is:
    My fiance and I are getting married in May 2013. We live in Pennsylvania. In 2009 my fiance foreclosed on his mobile home mortgage he had through Vanderbilt Mortgage. This was very much due to a divorce. His ex-wife continued to live at the property but never paid the mortgage during that time. In 2011 I bought the house we are currently living in. The loan and house are both in my name only along with both of our cars. My question is, once we get married, if the mortgage company does decide to pursue him would it affect me if he files bankruptcy? Would they be able to pursue myself as well (house, automobiles?) I am not planning on putting anything into his name once we are married strictly for this purpose. Any advice you could offer would be greatly appreciated. We have not heard from this mortgage company since last year but I am not sure that means they are going to leave us alone forever.

    • Robert Weed

      March 27, 2013, pm31 4:55 PM
      121

      Amy:

      Your assets will be safe–but it could be that being married would affect his income eligibility if they do come after him and you would not want him forced into a Chapter 13. you must be making pretty good money to buy a house just on your credit.

      To be safer he should at least consider filing bankruptcy before the wedding. Again, I’m not worried about your assets, but I am worried about the new family income eligibility.

  • Cindy

    April 6, 2013, pm30 12:51 PM
    122

    Dear Sir,

    Your site is very informative, I appreciate your effort.

    I am currently in a chapter 13. I have been selected for a new position with a new company…very exciting. Here is my worry. My bk is garnished from my pay . I am afraid that this will look bad with the new employer. I reside in a “fire at will state”.

    This new job opens a big door for me and being a young 50 something, it is an honor.

    Not sure if you had experience with this subject. I am new in the bk process (3 months).

    Do I have a discussion with the new HR dept first? It is a bit embarrassing for me. I would talk with my bk attorney, but he is so young, not sure if he would get it.

    Kind regards.

    • Robert Weed

      April 6, 2013, pm30 9:46 PM
      123

      Cindy:

      Yeah, it’s nerve wracking. Some of my clients do feel that being in Chapter 13 has hurt their careers.

      But, I doubt that in your case. Your new employer when you applied for this job, almost certainly pulled your credit. So they knew when they offered you the job.

  • Carmen

    April 12, 2013, pm30 1:23 PM
    124

    Hello Mr. Weed

    I also received a letter from Strategic Recovery Group saying the proceeds from the foreclosure sale did not satisfy the entire amount owed and that a deficiency balance remains due. My first mortgage was through Green Tree. I only had the first mortgage, the investor was Fannie mae? I live in Florida and they can sue for deficiency. Should I file for BK now or wait it out and see if they do sue?

    • Robert Weed

      April 12, 2013, pm30 1:53 PM
      125

      Carmen:

      Don’t know–one big question is are you eligible NOW; and are you in danger of losing eligibility if you wait. Or if not eligible now, can you arrange to be eligible. That’s what you need to go over with a lawyer.

  • Sarah

    April 17, 2013, pm30 10:11 PM
    126

    Dear Mr. Weed,
    You have given me a glimmer of hope…THANKS!!! What is your understanding on how a “line of equity” held by the same bank is dealt with in a foreclosure proceeding? It was never used but yet I’m still liable for it when I defaulted on mortgage. I live in Illinois and my home is set to be foreclosed at an auction sale on the 25th of April. I don’t know if it’s best for me to just file bankruptcy now and avoid a foreclosure on my credit report or wait and see if there is a deficiency still pending. I don’t plan on keeping the home any longer I just do it any more. Also are chapter 13 always garnished wages? Thanks so much for taking your time to inform the public…it’s been most helpful.

    • Robert Weed

      April 18, 2013, am30 6:30 AM
      127

      Sarah:

      If you are looking at an April 25 foreclosure, you need to talk to a lawyer there in Illinois TODAY! It may be that you have eligibility to file Chapter 7 bankruptcy now, and you’ll lose it when they foreclose. Then if they come after you, you’ll really be in a mess.

      (On Chapter 13, most courts require a wage garnishment, but some still don’t. I don’t know about your court. Why are you asking about chapter 13? Chapter 13 is sometimes used to catch up the house, but you said that’s NOT what you are trying to do. You need to put your whole situation in front of a good lawyer who knows your area–RIGHT NOW.)

  • Robert

    April 28, 2013, am30 9:23 AM
    128

    Mr. Weed,
    We live in NC. 1-1/2 yrs ago we purchased another home and made our prior home a rental. The tenants that moved in filed chapter 13 shortly after moving in. After a few months it became difficult to collect the rent from them, forcing us to use our own resources to pay the mortgage. We began to “rob Peter to pay Paul”. During this time we experienced a financial hardship of our own and we got behind on the mortgage payments for the rental property. The tenants have since moved out but we were never able to get the mortgage current. We got so far behind that we decided not to pay and our income prohibited us from any modifications and probably from bankruptcy (at least chapter 7). The sale date for the home is in June 2013. The mortgage was a refinance with National City Mortgage (transferred/sold to Greentree Financial), and is the only mortgage on the home.( No HELOC, etc) We have a bit of credit card debt, student loans, auto loans etc.What are my chances for a deficiency judgement? (We owe $201,000, current FMV est $175,000) Should we be investigating Chapter 13 as a possible choice? Thank you
    R

    • Robert Weed

      April 29, 2013, pm30 12:13 PM
      129

      Robert:

      You shou;d be investigating Chapter 13 with a lawyer who knows your complete situation. But if the rental sitting empty I would not rule out trying for Chapter 7. Your lawyer needs to look at that very carefully.

  • shanequa

    May 16, 2013, am31 3:19 AM
    130

    I live in Georgia and purchased a townhome as a forclosure for $89K. I later got married and moved out into a home with my husband. There is currently a tenant living in my home but she is moving out in the next few months. The townhome is now only worth $35K and theres no way another tenant will move in. If I let it foreclose, will I need to file Bankruptcy? Will this effect my husbands credit? Can I be sued? What happens with the tax situation being that the taxes are rolled into the mortgage? This is a first mortgage with Bank of America FHA. I purchased it in June 2008. I don’t mind my credit going bad. I just dont want my husband’s credit to be effected. Nor do I want them to go after any of my bank accounts/assets.

    • Robert Weed

      Robert Weed

      May 16, 2013, am31 11:03 AM
      131

      Shanequa:

      If you bought the house by yourself before you got married, then you do’t need to worry about your husband’s credit. It won’t be affected.

      If the taxes are rolled into the mortgage, then the mortgage company usually keeps paying the taxes, even if you don’t pay them. Usually, I can’t say always.

      Yes, you can be sued after the foreclosure, in most state. I think Georgia is one of the state where they can sue you–a lawyer there would no. Sometimes they don’t sue even when they can–maybe because they were overwhelmed. Now that foreclosures are slowing down, I’m seeing them sue more often.

      Bankruptcy may be the best way to protect your assets over the long haul–depending on what you have, that may take some planning, so it would be smart to talk to a lawyer there in Georgia, soon.

  • Kristy

    November 12, 2013, pm30 8:10 PM
    132

    We lost a house we built in ’08, it was sold at auction in ’09. It was an investment purchase that some realtors pressed us to go for being it was a good time flip it. I have like 20 letters from the lenders attorney that say it is an attempt to collect a debt. Way back in ’08 we got a summons in the mail that we were being sued. We sent a hardship letter and nothing really happened. Since then peroidically, they keep telling us we have 45 days to show them our finances in order to decide what to do next. The last letter came last week again asking us to fill out papers proving our income. BUT…. this time…it was a certified letter. Do you think this means they are serious now? Time is up in Feb.’14 being it will be five years. We don’t know if we should wait to see what happens or hire an attorney and file bankruptcy. We hate to do that because our credit is pretty good and we have no other debt at all except student loans. What do you suggest?

    We are in Florida

    • Robert Weed

      Robert Weed

      November 12, 2013, pm30 10:56 PM
      133

      Kristy:

      I don’t know enough about how they do things in Florida to have any more than a guess. sorry.

  • Dianne

    May 15, 2014, pm31 10:04 PM
    134

    I’m in FL and we are being sued ( I think) on a first mortgage for one home and a second mortgage on the second home. By the way Mr. Weed, you almost made me cry because you look like the nicest man on the EARTH. Almost grandpa-like. You look so KIND!!!

    • Robert Weed

      May 16, 2014, am31 11:04 AM
      135

      Dianne:

      Thanks for your kind words. Hope you find a lawyer in FL who can help you.

  • John

    July 7, 2014, pm31 11:31 PM
    136

    In Virginia , how long does the first mortgage have to sue for deficiency ? Is it 5 five years from the last payment , or 5 years from the date of foreclosure..or neither of the above ?
    Thank you for your blog !

    • Robert Weed

      July 7, 2014, pm31 11:35 PM
      137

      John:

      From the last payment is my view of the law. BUT, I think that a mortgage can sue under the Six year SOL for “notes.”

  • Rodney

    July 8, 2014, pm31 10:56 PM
    138

    I have a house that is foreclosed on in MI less than a year ago due to work, but I moved to VA and found a job and purchased a house here about five years ago and for a while went back and forth trying to find work back in MI and had family living in the home and helping me pay the mortgage but after a few years finally they couldn’t help anymore and I couldn’t afford the MI property anymore, they have foreclosed and my brother in law is staying their and just got a 90 day notice to vacate with a possible $1000 pay out if we get or stuff out in 30 days. and I am not in credit card trouble but do still owe a 1000 on line of credit on house,

    • Robert Weed

      July 9, 2014, pm31 7:36 PM
      139

      Rodney:

      From the little I know, Michigan is a state where the first mortgage can track you down, sue you and garnish you after the foreclosure. I don’t know anything about whether they usually do. (In Virginia they can but usually don’t.) So you have a tricky choice….do you want to file chapter 7 bankruptcy now (if you are eligible now) to get it behind you. Or wait until they do (or don’t) come after you and then hope you have eligibility then if you need it.

      I think you’d be smart to talk to a lawyer now.

  • Jackson

    August 4, 2014, am31 3:45 AM
    140

    Mr Weed thank you for your time.

    We have a foreclosure date on our primary residence in VA. First and only mortgage through now green tree. The sale date is at end of month Aug. I am considering chapter 7 as a way to clear the deficiency after the sale. My credit has obviously plummeted already and I have little to no assets. Should I consider chapter 7 now or wait to be sued for the deficiency? Green tree simply told me they would notify me by mail as to when we should evacuate the property. Thanks for any help – Jackson in VA

    • Robert Weed

      August 4, 2014, am31 10:10 AM
      141

      Jackson:

      If you file Chapter 7 just before the sale date, you can block it, and get yourself another three to five months of living there free. If you are husband and wife; you can each file separately and get yourselves six months to MAYBE a year. Unless you have already moved out, you should discuss your choices with a lawyer now.

      There’s also some possibility that the BK now will jolt Greentree into offering you a mod that you can afford. So, DON’T WAIT.

  • Angie

    September 15, 2014, pm30 4:59 PM
    142

    Hello. Thank you for your time. In 2008, multiple properties were foreclosed on, in 2009, car was reposessed and multiple credit cards were left with balances on them- eventually all reported on the credit report. I have not touched my credit since then- kind of been living on cash for obvious reasons. Should I now file for bankruptcy?

    • Robert Weed

      September 15, 2014, pm30 7:12 PM
      143

      Angie:

      Hard to say. I don’t know what the statute of limitations is in your state. In other words, are they too late if they want to sue. If they are barred by SOL, then maybe you can get back to good credit without having to go through the bankruptcy.

      If you had filed Chapter 7 in 2009, you could have GREAT credit today. But you didn’t, then. Today it may be safe to start rebuilding your credit now. Depends on what the SOL is in your state.

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