Fraud on Finance

Forelosure Bankruptcy Tips

If you’re facing foreclosure and wondering, “Will I be able to keep my home if I file bankruptcy?”, there may be options for you. Filing for a Chapter 7 Bankruptcy can possibly delay your foreclosure for a few months. A Chapter 13 Bankruptcy filing may even help you save your home altogether.

Reaffirmation Agreement

In bankruptcy, a contract signed between the lender and the debtor.

  • Reaffirms the personal liability for the debt.
  • Must be entered into before the Discharge in Bankruptcy is filed.
  • Must be approved by the court.

Pros of Reaffirmation Agreement

  • Usually to lenders advantage because it keeps you binded to the debt.
  • You have 60 days after signing the document to revoke.

Loan Modification

  • Permanent change in your mortgage loan terms.
  • Allows the loan to be reinstated under the new terms.
  • New terms include a new mortgage you can now afford.

FDIC Sponsored Loan Modification Program

The Homeowner Affordability and Stability Plan

  • Helps borrowers who cannot make their payments due to insufficient income.
  • Provides options for borrowers who are up-to-date on their payments, but can’t refinance because of a major decrease in the value of their home.
  • No fees for borrowers through this program.

Can I Keep My Home in Bankruptcy?

When you’re asking yourself, “Can I keep my home in bankruptcy?”, keep a few things in mind.

Order of Relief

When you file for bankruptcy, an Order for Relief is automatically issued by the bankruptcy court.

  • Includes an “automatic stay” ordering all creditors to immediately stop all collection actions and activities.
  • Any scheduled foreclosure sales are legally postponed during the pending phase of the bankruptcy.

Chapter 13 Bankruptcy Mortgage

1st Mortgages & Chapter 13 Bankruptcy

  • Arrearage is paid off over the length of the new repayment plan.
  • As long as the repayment plan is followed, foreclosure will cease.

2nd and 3rd Mortgages & Chapter 13 Bankruptcy

  • Court can “strip off” 2nd and 3rd mortgages.
  • 2nd and 3rd mortgages can be re-categorized as unsecured debt, making them last priority.

Chapter 7 Bankruptcy Mortgage

  • Time to Save – During the pending phase, you can live in your home free for up to several months. This gives you time to save money to relocate, or possibly save your home.
  • Get Debt Canceled – Chapter 7 Bankruptcy cancels all debt secured by you home. This includes your 1st mortgage, 2nd mortgages and home equity loans.

* These are just tips to help you understand whether bankruptcy can help you. For legal advise, please contact a bankruptcy attorney.

Ways to Rebuild Your Credit After a Bankruptcy

If you’ve filed for bankruptcy at some point, you know that it not only affects your finances, but equally does great damages to your credit score. And while it may seem like a daunting task to rebuild your life after bankruptcy – amid working on your credit rating, your finances and emotional wellbeing – there truly is life after all these. Rebuilding credit after bankruptcy is quite possible even eventually attaining a credit score of 700 or 750. How do you make this possible? This article gives you 5 ways to rebuild your credit after a bankruptcy that will undoubtedly help you.

Reviewing your credit report

Your journey to rebuilding credit begins when you know exactly where you stand with your credit and the far you have to go to get to the score you ultimately want. Mark dates to get copies of your credit report from major bureaus. When you know that a credit score above 750 is often considered excellent while one below 400 is considered very poor, you’ll know how drastically you need to restructure your finances to get your desired score.

Creating Realistic Budgets

After a bankruptcy, you’ll need to become extra cautious about your finances. And even if you’ve never created a budget in the past, this is the time you’ll need to do this and be serious about it. Your budget acts as your spending plan that will help you manage your cash flow, in turn, preventing you from getting into unnecessary debts. Budgeting helps to prioritize and leaves room for any debt repayment, savings and bill payment.

Taking care of all your existing bills on time

Make it a priority to take care of all your current bills on time. You can set up automatic bill payments whenever necessary and don’t forget to take care of your rent on time as these payments are often tracked and may play a huge role in your credit score. On-time bill payment is one of the most powerful things that will eventually help restore your credit and finances.

Get a secured credit card

Obtaining a secured credit card is another important strategy for rebuilding your credit score. You can deposit a certain amount on your secured card say $500 and this becomes your credit limit. You’ll gradually be able to rebuild your credit by charging minimal amounts every month and settling your debts on time.

Open a new savings and checking account

Think of opening both a savings and checking account if you don’t have any. Choose a local bank or credit union based on various criteria including talking to friends and family, comparing interest rates and considering the services rendered by each bank.

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