Still confused BK and foreclosue and taxes

[emaretta]

I'm in FL, not sure if I'll be filing ch7 or ch13...I meet with atty tomorrow.
I was going to inquire about short selling both my homes, but after reading posts on this forum regarding the taxes on the difference, I don't think I want to do that.
So my next option is file BK...and then what? At the filing do I turn my house over? Or will it just naturally foreclose in a few months when I stop making payments? If it's part of the BK, won't it happen altogether, or are they treated completely separately? I just don't know what to expect.
Would a foreclosure be worse than a short sale on my credit?
I'm completely at a loss what to do with my homes.
My primary home is current (on deferred interest) and my rental is 2 months behind.
Also I read to keep paying on the real estate taxes..how do I do that if they're escrowed into the mortgage payment?

[HHM]

The basic process is,

1. You stop making payments
2. The banks start normal collections efforts (i.e phone calls, letters, etc)
3. Depending on how long you wait to file, foreclosure may start
4. You file BK
4a. As a result of you filing BK, all collection activity must cease, including a foreclosure.
5. If your intention is to let the homes go, your statement of intention in your BK petition will say so.
6. The bank will make a motion in the BK (or sometimes simply wait for you BK to be discharged) to lift the automatic stay.
7. If that motion is granted (or if you are discharged) normal foreclosure proceedings will continue (or start if foreclosure has not already started).

[demismom]

What HHM said. That's EXACTLY how ours went. We had a rental, but decided to keep our primary home. Everything went as planned and expected. Our rental sold at foreclosure sale last Thursday, the 20th, for FAR less than was owed on it.

[emaretta]

Thanks HHM! So I guess as soon as I've decided to file, I can just stop making payments.

Thanks Denismom...did you have tenants in your rental? I feel horrible because they only moved in 3 months ago from a different state and they have a child in elementary school...The even asked me if I planned on selling the house during their lease b/c a previous landlord has done that to them and they got screwed on their rent, of course at the time I said no b/c i didn't plan on selling anytime soon.
Do you know what happens to them? Their lease isn't up until July 08.

thanks again!

[demismom]

No - they left us high and dry for about $1600 AND stole all the appliances out of the house.

I was told that SOME states require that mortgage companies honor any leases in effect at the time of foreclosure, but I think I read that here, so maybe check it out for them.

[emaretta]

that's horrible! I feel your pain, my previous renters left 2 weeks before christmas only 4 months into their lease (like I had any extra money to pay 2 mortgages!) and then left the place a MESS!!!! It took me 11 months to get it rented again for less than what I owe (part of my bankruptcy mess).
I am going to ask my atty today if I could sell the home for exactly what I owe so atleast their lease would have to be honored with a private buyer instead of sticking them throuh this whole foreclosure mess which is my problem not theirs.
As long as I don't make any profit it shouldn't interfere with my bankruptcy, no?

[Priapism]

The basic process is,

1. You stop making payments
2. The banks start normal collections efforts (i.e phone calls, letters, etc)
3. Depending on how long you wait to file, foreclosure may start
4. You file BK
4a. As a result of you filing BK, all collection activity must cease, including a foreclosure.
5. If your intention is to let the homes go, your statement of intention in your BK petition will say so.
6. The bank will make a motion in the BK (or sometimes simply wait for you BK to be discharged) to lift the automatic stay.
7. If that motion is granted (or if you are discharged) normal foreclosure proceedings will continue (or start if foreclosure has not already started).

So basically # 7 completely negates # 4a ?

I just want to be clear on this. Your BK which is supposed to PROTECT you from foreclosure, in fact does NOT protect you, and you're toast no matter what, with both a BK and a Foreclosure on your credit?

[B12]

No need to keep paying property taxes, if escrowed, they will be paid, though.

Do keep up fire and liability insurance on all properties until deed out of your name.

[keepmine]

I just want to be clear on this. Your BK which is supposed to PROTECT you from foreclosure, in fact does NOT protect you, and you're toast no matter what, with both a BK and a Foreclosure on your credit?

At the end of the day, you have to pay your secured creditors if you want to keep the property. Your are protected in the sense you can't be sued for a deficiency balance but, the lender then has to be allowed to reclaim there property.