File Ch. 7 Before or After Foreclosure?

[Broke1]

I am one month behind on my mortgage (June) and stopped paying all of my CC's in January/February 2010. If I were to sell my house I would walk away with nothing due to the current value. My mortgage is through BoA and I'm in Ohio. I would like to stay in my home until May/June of next year and then make a move to a different part of the country. If I don't make anymore payments, when will BoA file for foreclosure? I'm guessing it will be August or September. Am I thinking correctly about the timeline?

What I'm trying to do is buy time to keep me in the house and save up some money until I make my move next May/June. Accordingly, is it better to file Ch. 7 first, or should I wait until I get my forclosure notice to file? What are the pros/cons to each scenario? Thanks for any information that you can provide.

[StartingOver08]

If you are looking to save money, then file BK first IMO.

There are limitations to the amount of cash you can save when filing BK because of the exemptions. Look up your exemptions to determine the maximum cash you are allowed to have as of the filing date. This link contains your state's exemptions:

http://www.legalconsumer.com/bankruptcy/state_bankruptcy_info.php?st_fullName=Ohio

After you are discharged, the foreclosure process must still continue and you can use that time to save funds. During the BK the lender is stopped from continuing the F/C process unless they move to lift the automatic stay. You will not be limited to your exemption amount in your savings once you are discharged. Also you won't have to worry about creditors siezing your bank accounts. It is much easier to save.

Check with your attorney as to the timeline for each (F/C and BK).

[youngnbroke]

Its my understanding that it is MUCH better to file bankruptcy prior to foreclosure...the foreclosure (and any deficiency) will be in with the bankruptcy. After filing, just DON'T reaffirm the debt with the mortgage, and I THINK that it will only count as one "bad mark" on your credit vs. two. The foreclosure will only be listed in the county of which you reside, and not on your credit report. I THINK! Or HOPE actually!

As far as timelines go...it varies state to state and even by lender i think. I'm in Wisconsin and all i could find is about 12-18 months after the first missed payment.

[feelingnutsy]

Now I'm confused---I'm hearing that allowing foreclosure first then gives
you the leverage to stop eviction temporarily---by filing bankruptcy---and
gaining some time in the house.

[StartingOver08]

Now I'm confused---I'm hearing that allowing foreclosure first then gives
you the leverage to stop eviction temporarily---by filing bankruptcy---and
gaining some time in the house.

Is this the advice from your attorney? If so, then maybe your district is run differently than my district. Do speak to your attorney. If you don't have one yet, interview several until you find the right one. Naturally an attorney right in your district will have insight for your particular district.

[feelingnutsy]

Hi there---StartingOver08---he's done this with other clients---
and finds that it buys them more time in the house.Does this sound
bass-ackwards to you?

[StartingOver08]

It is just the opposite of what my attorney said, but then again, I'm in Fl. It's possible that your district works completely differently than mine.

Also, here our exemptions are extremely small if you are giving up your homestead so saving money pre-filing is impossible because you can not exempt but a very small amount. So it is more beneficial to file BK first, then have the F/C complete.

What are your exemptions? You might have very generous exemptions....

[feelingnutsy]

Hey---StartingOver08---I'm in Virginia---and exemptions are not that great--
but everything I've got can be exempted.

As for my house---I've been there almost 33 years---it's $65,000 underwater-
about 15%---and it needs roughly $20,000 in upgrades/repairs---so this is an
obvious surrender situation.

I believe that homestead exemption is $5,000---not much---and there is
a wild-card category of another $5,000---but I don't need it---given the
above situation on my house.

[StartingOver08]

Can you use the wildcard for cash?
Here we have a $1000 auto exemption + $5000 exemption only if you surrender your home. Otherwise its $1000 auto and $1000 for the rest! Husband and wife can double here.

Your exemptions are pretty good: http://www.legalconsumer.com/bankrup...law.php?&ST=VA

Not as good a California, but better than Fl!

[feelingnutsy]

Thanks for the info and link---StartingOver08---and yep---wildcard for cash.