In Kentucky for 2005, home foreclosures ran at 5%.
Sometimes the only way to stop a home foreclosure is by filing a Chapter 13
Bankrupcy. You are Bankrupcy Attorney allowed to take up to 2 years to repay arrearages
in a Chapter 13 Bankrupcy. In Kentucky, a Chapter 7 Bankrupcy will
only temporarily stop home foreclosures. But you may want to file an answer
and a Chapter 7 which may allow you to stay in the house for a year or more
before the foreclosure is final and you have to move. Just by
eliminating Mortgage Net Branches unsecured debt in a Chapter 7 Bankrupcy you may afford your
home and avoid foreclosure. Sometimes you may want to include
other home foreclosure options with your Bankrupcy.
LOAN MODIFICATION - Some mortgage lenders will negotiate
payments and home foreclosure fees being added to the back of the loan. Home
foreclosures are prevented and in some cases interest rates can be reduced.
Drawback: your Bankruptcy Chapter 13 loan may still be a bad loan or a home may still be
undesirable.
FORBEARANCE PROGRAMS - Some home lenders offer home foreclosure workout
programs. You immediately pay an amount normally including foreclosure
fees, the balance is added over a period of 6 to 24 or 48 months.
Drawback: How to afford it.
SHORT SALES This is an example of a paying to a lender
less than what is owed for a property. Often a relative or
friend buys the property as a straw man and sells it to you. As an
example Loan $250,000 -- Lender estimate of
home value $185,000-- Expected proceeds of foreclosure sale 150,000 --
Expected expenses of foreclosure 10,000 Offer $145,000 house sold back
to Debtor! Drawback: Beware of others that make this offer to
"help" you after a Bankrupcy or foreclosure is filed. It may be an
attempt to steal your home. Also there may be tax consequences for
forgiveness of debt if you do not file a Bankrupcy and do the short sale.
Mortgage companies will 1099 you for the loss as income and then you owe a
massive tax debt.
Chapter 13 Bankrupcy - Only a Chapter 13 will permanently
stop a foreclosure. You can take up to 2 years to cure your arrearage.
Filing an answer to a foreclosure will delay it 6 months to a year and a Chapter
7 will delay it for 6 months to a year. Tax consequences if filed at the
right time = none.
