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Bankruptcy and Foreclosure |
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IS THERE ANYTHING YOU CAN DO ABOUT A HOUSE THAT IS A LEMON. WE OWN A HOME WITH FOUNDATION PROBLEMS. WHAT IS THE DIFFERENCE BETWEEN FORECLOSURE AND BANKRUPTCY |
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With a bankruptcy, you declare that you are unable to pay your debts, and a court takes over and decides what you can pay and what you must pay, usually over a period of time. Your mortgage remains in force, though you might have some months you could stay in the house before losing it. A bankruptcy remains on your credit record for ten years, though you can sometimes get a new mortgage loan when four years have passed, if you have kept a good payment record on any new debts.
With a foreclosure, your mortgage company puts your house up for auction to pay off the debt. If the sale doesn't bring enough to cover that, plus back payments, back taxes and legal costs of the foreclosure, in most states they can go after you getting a judgment for the shortfall. Having a foreclosure on your record often makes it impossible ever to get another mortgage loan.
As for your foundation problems -- there I can't help you. You need an engineer's advice.
If you can sell the house for enough to cover the debts against it, that might be your best way out of the problem. You'd have to be frank about the foundation problems, but there are often investors or handymen who are ready to buy problem houses -- as long as they know about it beforehand. |
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Edith
Originally published on November 13, 2007 |
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