| Q: Our home is in foreclosure, and we have
received many, many offers to help us. Some of these want the deed to the house
(which will then be rented back to us); others tell us to deed the house to them so that
our credit will be saved. We have also received several proposals from
attorneys to "stop the foreclosure"; in talking to them, we have found out that
his involves bankruptcy.
Other than the house situation, our credit is excellent. My question is:
will the bankruptcy wave our house?
A: Anybody who is faced with a foreclosure situation is familiar
with the tons of mail that you are receiving, including phone calls, visits,
solicitations, etc.
Welcome to the world of the "foreclosure chasers"! Who are they?
Well, to modify a joke about the world's "second-oldest" profession, there is a
question: What is the difference between a catfish and a foreclosure chaser?
The answer is: One is a slimy, mud-sucking scavenger that eats filth - the other
is a fish.
I have written previous columns about the fraud of "deed your house to me for a
fee" offers; now, let's chat about bankruptcy.
I can't answer your particular situation, because I would need to know if there is
"substantial" equity in your house, as well as the amount of your other debts.
If there is little or no equity in the house and you do not have a substantial debt
load, bankruptcy is probably the worst thing you could do. |
Seek out the advice of a CPA or attorney for a second
opinion. The bankruptcy attorney "mills" that contact you are
"debtors' attorneys" and, frankly, are not very interested in your welfare.
They devote very little (if any) individual time and do not - I repeat do not
- stop your foreclosure. They, in fact, only delay it. You do not escape the
debt, and with little or no equity, the only benefit is a 1-3 month delay in the
foreclosure. Debtors' attorneys usually won't tell you that the secured lender will file
a motion with the bankruptcy court for a "relief of stay" and get into court
within 30 days of that motion and usually get relief (unless there is substantial equity).
The attorney will also avoid the fact that there will be a charge (larger than the
initial fee) to represent you in bankruptcy court and then lose.
There certainly are good debtors' bankruptcy attorneys around, but I certainly don't
recommend the bankruptcy "mills".
Bottom line: Why file bankruptcy to save little or no equity and ruin the rest of
your perfectly good credit?
On the other hand, with substantial equity and/or substantial debts, bankruptcy is a
valid alternative.
But please, shop around for a knowledgeable, "friendly" attorney.
Food for thought: If there is little or no equity, try to work out a deal with
your lender for a "Deed in Lieu of Foreclosure". If there is substantial
equity, definitely get professional help.
Peter Rosenthal
VIP Trust Deed Company |