Bankruptcy – Foreclosures And Timing

forclosure

Debtors frequently file bankruptcy to stop a foreclosure action on real property. It is important that you keep your bankruptcy attorney advised of any scheduled foreclosure sale dates. If your bankruptcy petition is not filed with the court prior to the actual foreclosure sale, it is then too late to save your home through bankruptcy. Also, as you’ll read below, it may not be in your best long term financial interest to keep your home. New Mexico Financial Law can advise you in these and all other bankruptcy questions.

It May Be In Your Best Financial Interest To Sell Your Home!

Foreclosures And Buying Another Home

Personal bankruptcy and foreclosure are not home buying deal-killers. In fact, you can often easily buy a home two years after your foreclosure or bankruptcy. Lenders will want to know if your financial problem was caused by an explainable “one time only” circumstance something like job loss, a failed business venture, or a serious illness. If there have been other credit problems in your history or if you just plain spent too much money, it will be more difficult to get another home loan. The next thing a lender will assess is your bill payment record after the bankruptcy or foreclosure. It’s crucial to re-establish timely payments.

Many times, Private Mortgage Insurance (PMI) companies won’t insure people who’ve been bankrupt or foreclosed on. A larger down payment (20%) will eliminate the need for mortgage insurance. And, depending on the lender, you may be able to buy a home sooner than two years after your troubles. It’s likely you’ll pay a higher interest rate but later you can refinance, once you establish a good financial track record.

Credit Counseling

Under the new Bankruptcy Act of 2005, credit counseling and/or other options may be required. For foreclosure help the first step is to contact a bankruptcy lawyer to find out all your legal options and rights. Don Harris is an Albuquerque bankruptcy attorney and can assist you through the legal issues of bankruptcy and foreclosures and recommend advisers to assist you in the financial details. You can contact Don Harris.

FHA Eligibility with Bankruptcy and Foreclosure

A credit report will be obtained on the borrower and any late payments, collections, judgments, foreclosures, bankruptcies, etc. must have a justifiable explanation in writing by the borrower.

In the event of a foreclosure, the borrower has three years from the date the claim was paid until he/she is eligible for another FHA loan, unless the foreclosure was the result of extenuating circumstances beyond the borrower’s control and the borrower has since established good credit.

Chapter 7 bankruptcy requires the borrower to wait at least two years from the date of discharge.

Chapter 13 bankruptcy requires the borrower to have been paying on the bankruptcy for at least one year, performance must have been satisfactory and the borrower must also receive court approval to enter into the mortgage transaction.

Should You Keep the House?

Intuitively, or perhaps emotionally, one would think that it is always best to try to keep your home during times of bankruptcy. It is not always the case; if it is fully encumbered (that is, the debt on the house is equal to or greater than the value of the house). Part of getting a fresh start may be walking away from property that is a greater burden than an asset. You may contact Don Harris’ Bankruptcy Law Firm and they will advise you on the legal and financial ramifications of keeping your home or allowing it to default in foreclosure.

New Mexico Financial Law is an Albuquerque, New Mexico based bankruptcy law firm which provides United States Bankruptcy legal services and advice throughout the state. The majority of its clients reside in the Albuquerque, New Mexico, area, i.e., Albuquerque, Bernalillo, Rio Rancho, Los Lunas and Belen. But the firm can also represent clients statewide in Hobbs, Las Cruces, Clovis, Farmington and other New Mexico cities. Don Harris represents clients who reside in New Mexico and also New Mexico residents residing in out-of-state jurisdictions. Bankruptcy law, as practiced by New Mexico Financial Law addresses all of a client’s concerns; legal, financial, and emotional. Don attempts to settle bankruptcy cases through negotiation. If negotiation is unsuccessful then the trial skills of Don and his firm are brought into play. Don Harris is a well-known and respected Albuquerque, New Mexico, lawyer. Don Harris not only provides the legal bankruptcy advice and guidance expected of an experienced lawyer, he also works with other professionals such as financial advisors, CPAs and mental health counselors to provide the firm’s clients with many of the services needed to get through their financial and personal challenging times.

The hiring of a lawyer is an important decision that cannot be based solely upon advertisements. Before you decide, ask us to send you free written information about our qualifications and experience.

Contact New Mexico Financial Law Today for a Free Initial Bankruptcy Consultation!

Pursuant to 11 U.S.C. §528(A)(4) We are required to state the following: We are a debt relief agency. We help people file for Bankruptcy relief under the Bankruptcy Code.