Filing chapter 7 and facing foreclosure

[Panacea]

So, I've decided to file chapter 7. I'm learning alot about what to expect and thank you all for your support. My question is now, the impending foreclosure. This is the 1st month I have missed the mortgage and heloc payment. I am giving up the house. From what I understand, the foreclosure is somewhat separate from the BK and could take anywhere from 90 days, to a year to actually be put out of my house. (I am in MD)

I've been told, unless I'm trying to fight the foreclosure, I really don't need a real estate attorney, but I'm not sure what to expect down the foreclosure "road". I'm understand that I will be getting calls, and notices, but am no legal scholar and don't want my stuff thrown out of the house for not understanding whats going on. I will be renting, but haven't begun that journey yet because I don't know if I should rent right now, or wait till the BK7 is discharged, and the foreclosure begins or ends. I would have somewhere I could go should it be fast and furious when foreclosure comes and I couldn't find a place to rent that quick, so I won't be homeless, just have to move twice in a short period of time. Of course, as usual, I am worried.

I guess my questions are...
1. Should I be finding a place to rent now, even before all the chit has hit the fan?
2. If I hold out till filing chapter 7 till Dec, by missing Sep, Oct, Nov mortgage payments on the house...thats 90 days....could I already be foreclosed on before filing?

[tobee43]

well, i can only relay our expereince and this is what it was:

the first thing we did...NUMBER 1 was find and secure a new place before everything "hit" the fan. since we were NOT paying our mortgage anymore we were able to "afford" the place and it was prior to our credit completely going down the tubes. it worked out great for us.

we knew we were not going to reaffrim our home as well. that was only AFTER we had worked with the bank...probably for almost a year (prior to any government programs being put in place). however, we were working with the bank on a loan mod when we got served with the forclosure papers...(our bk atty advised us two things...stop paying and don't answer the summons since you are NOT fighting the forclosure).

that really helped because we STAYED...(and by the way it's two years later and still the house is NOT sold at sheiff's sale...NOT even listed yet...but it gave us the opportunity to stay there and take the money and put it into the new place....we just paid the rent, however, just to let you know we could STILL be living in the house rent free now! some people do that. we chose not to. so it's a personal chose...at least our credit was still great when we left so we were able to make a "more" comfortable move...although nothing is comfortable about any of this situation....other than the date of discharge!

we waited almost 2 YEARS before the actual filing of our petition...so you can do it when you want to. it worked well for us since we left no forwarding address or numbers and left the state...so we went underground..LOL!!! like on the lamb...holly cow and a half it sure made us feel like criminals...although interesting experience to say the least.

hope that helps a bit. i'm certain others have experiences to share that might be insightful!

[ccsjoe]

Hi Panacea,

Yes, the BK and foreclosure are two different animals under different laws and rules. You are correct in that if you are not going to fight the foreclosure you do not need a real estate attorney. The bk will extinguish the lender's ability to collect on the mortgage but will change change ownership of the real property. That will be done by foreclosure.

Down the foreclosure road: You will be served with a Notice of Default prior to any foreclosure action initiating. NOD's were typically done at the 90 day past due mark. Nowadays, some are taking a lot longer to do these. These are instruments filed and recorded with your county recorder. A copy of the recorded instrument MUST be mailed to you. So until you get a notice of default, or its equivalent in MD, you're ok timewise. An NOD is a pre-foreclosure stage. Before you get thrown in the streets you will have ample opportunity and notices. You may even be able to negotiate a surrender of the property. See my blog on this site on cash for keys for an idea of this.

As for renting, your call entirely. You know it will be more challenging to rent with a bk on your record, but not impossible. It is entirely up to your tolerance for the unknown at that point. Do you gamble the bank will take its sweet time to foreclose? Odds are yes, but it's a gamble.

[Panacea]

Thanks for all the great advice.

So, I'm thinking of renting before my credit goes way down below! Would I just come back to the house I have now and get mail, check on things etc? I've only missed this months payment so far, so haven't even been contacted by the mortage company yet (though my heloc peeps sent a friendly reminder in the mail). Is it too soon to think of moving out and renting by Dec 1st? AND do I let the mortgage company know?

[justdidit]

I'm also in MD and filed bankruptcy (CH7) last month. The main factor for my bankruptcy was the home. I haven't paid for it (1st and 2nd mortgage) since July 2009 and it's still in my possession. I recently got a note from a lawyers office that the mortgage company has gotten regarding the nonpayment but nothing is finalized yet. After talking to a few people in the legal/housing market, they estimate several months before I have to leave my property for good. I do wish they'd just take it already and will contact them to get the home to them quicker, but we shall see what happens. It's all up to the bank if they wanna drag their feet or not.