My sister is thinking of filing for bankruptcy, but not sure if she should. She is only going to file beacuse of the Heloc which is $50,000.
Should one file for bankruptcy while in the foreclosure process or should one wait for after the foreclosure?
Originally posted 2009-11-19 14:50:04. Republished by Old Post Promoter
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I recommend that you hire an attorney who specializes in bankruptcy law.
There are a number of issues involved and they are legal issues. It really takes an attorney who is licensed to paractice law to give you a good answer on that usbject.
She should probably talk to a lawyer about her options.
It’ll really depend on how much the payment plan will be during the bankruptcy. If she files a Chapter 13 now and includes the mortgage debts in the bankruptcy, she’ll have to make the payment plan on those, as well as the regular monthly payment on the house. If that’s too much, then she’ll fall behind, the bankruptcy will be dismissed, and she’ll be back in foreclosure.
But if she can wipe out some of her other debts in the bankruptcy, she might have enough income left to pay the mortgages on time. It depends on how much income she could actually free up if she does a Chapter 7, but that might be what she needs to get back on track with the more important payments.
It’s never a good idea to file bankruptcy as just a short-term solution, especially if her income won’t allow her to make the mortgage payments comfortably during the repayment plan term. Selling or giving the property back to the bank with a deed in lieu of foreclosure might be more applicable to her situation. But, again, she might want to consult with an attorney.
1. Get an attorney.
2. Doing it after the foreclosure sale is done would be bad IMHO. You don’t own the house anymore.