A Deed in Lieu of Foreclosure is when you sign over the Deed to the Mortgage company.  They may agree to a Deed in Lieu of Foreclosure in agreement to not pursue you for the default.  In some cases, you may be able to save yourself and the mortgage company the expense and trouble of foreclosure and bankruptcy.  However, you may be taxed as income for the amount that was forgiven. 

Many people choose to litigate or stay in the house rent free until the house is sold. This allows people to save up house payments they would have made to pay an amount down on a new home or lease with an option to buy.  Under Kentucky laws and regulations most people will qualify for a prime rate government mortgage 2 years after filing bankruptcy (if no foreclosure is involved), or 3 years after bankruptcy and a foreclosure.

The Foreclosure process takes less than 6 months if no answer is filed and 1 to 2 years if an answer is filed.  Even if you file bankruptcy under Kentucky law, a foreclosure is required to transfer the ownership to the bank. If you are stuck in a foreclosure see us for foreclosure help.