BK AND dil?

[fastninja]

Why is this so destructive on your credit report? Now im confused about filing for bankruptcy. The main reason for me to file bk is to get rid of my house that has been for sale forever and i cannot afford it after losing two jobs and getting cancer with-in a year. Will this actually follow me to my grave. Or explain situation in a letter to the credit reporting agencies?

[keepmine]

What is dil?

[BassBoy]

Basic definition......

DEED IN LIEU OF FORECLOSURE

A deed given by the mortgagor (borrower) to the mortgagee (lender) when the mortgagor is in default under the terms of the mortgage. This is a way for the mortgagor to avoid foreclosure.

Better explaination......

Deed in lieu of foreclosure

A Deed in lieu of foreclosure is a deed instrument in which a mortgagor (i.e., the borrower) conveys all interest in a real property to the mortgagee (i.e., the lender) to satisfy a loan that is in default and avoid foreclosure proceedings.

The deed in lieu of foreclosure offers several advantages to both the borrower and the lender. The principle advantage to the borrower is that it immediately releases him from most or all of the personal indebtedness associated with the defaulted loan. The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he would in a formal foreclosure. Advantages to a lender include a reduction in the time and cost of a repossession, and additional advantages if the borrower subsequently files for bankruptcy.

In order to be considered a deed in lieu of foreclosure, the indebtedness must be secured by the real estate being transferred. Both sides must enter into the transaction voluntary and in good faith. The settlement agreement must have total consideration that is at least equal to the fair market value of the property being conveyed. Generally, the lender will not proceed with a deed in lieu of foreclosure if the current fair market value of the property exceeds the outstanding indebtedness of the borrower.

Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily. This will enact the parol evidence rule and protect the lender from a possible subsequent claim that the lender acted in bad faith or pressured the borrower into the settlement. Both sides may then proceed with settlement negotiations.

Neither the borrower nor the lender is obliged to proceed with the deed in lieu of foreclosure until a final agreement is reached.

[lrprn]

What is dil?

DIL = Deed In Lieu. It's a deed given by a mortgagor to a mortgagee to satisfy a debt and avoid foreclosure.

[SinkingFast]

A DIL is a matter of public record that will show on your Credit Reports for 7 years. From what I've read at Credit Forums and Boards, DIL is actually less sever on your Credit Score than Foreclosure is. Only slightly, but still somewhat less. Just like Ch 13 is less of a hit than Ch 7.

It's a more of a morals judgement in the eyes of prospective future Creditors than an actual scoring factor.

As BassBoy said,.......... Foreclosure is a lengthy and expensive legal process. You, as the Debtor, recognized your situation and came to mutually agreeable terms with the Lender. Thereby saving the Lender lots of time and money, and a potential sale to a prospective buyer.