Are you brilliant?

[Priapism]

Good because apparently two BK attorneys and one Real Estate Attorney aren't 100% sure on the answer to this very simple question:

1) If I have a BK and am surrendering 2 properties, will I have a BK and 2 foreclosures on my credit?

Yes or No?

Additional possibly unnecessary information: Lender says no foreclosure as long as my payments PRIOR to bk are current. They will not attempt to have bk lifted and initiate foreclosure proceedings. BK attorney says this is "BS" and "YES" ill have a foreclosure on my credit no matter what. Lender replied saying if I owe $3k in late payments at time of BK, and I want to pay that 3k to them .. I wont have foreclosure. BK attorney again says that's BS ... and I will be expected to continue making mortgage payments even after the BK is approved, if I truly want to avoid foreclosure. Bank will still expect ongoing payments. I say thats BS because why would I be responsible for a debt if I got the debt discharged? The answers I am getting are all over the place. BK attorney says just take the BK and Foreclosures and dont worry about it. Id much rather ONLY have a BK on my credit. No Foreclosure. Lender says I can always work something out with them as it takes several months to complete a foreclosure anyways.

There's all the conflicting info Ive been given.

I am considering putting the houses up for sale again, to at least try to help find a buyer, even if its a short sale process. Despite all the conflicting info im getting, this seems like the most logical thing for me to do. If I can sell both houses, then I wont have to worry about foreclosure anyways. But of course id much rather (1) Stop paying now (2) Not even bother with anything.

I really need some solid input here from someone who knows how this goes down. My thought is that my BK attorney simply doesn't know anyone who has (1) Filed BK and (2) Remained current. The lender says if im current UP TO THE DATE OF BK DISCHARGE - NO FORECLOSURE will be on my credit.

ACK!!!!!!!!!!!

-P-

[busbis]

Look at this thread...

http://www.bkforum.com/showthread.php?t=17098

it makes a point to say that a foreclosure thats involved in a bankruptcy shows as one (if I'm reading it right). I can speak from what I have experienced working in the financial world. I too am surrending 2 properties (bad investments) which neither happen to be my primary residence. I plan of filing a bk13. I have no interest in short sales or the foreclosure because you tend to have 1099 tax issues. I am current on every debt I have including the 2 mortgages I plan to surrender. I am currently robbing peter to pay paul (from savings ofcourse, no cash advances) to pay current. I have seen where people have filed bk and surrender a home and within months there scores are in the mid 600's. This is because they were never late on anything and prior to filing and when filed, they reafirmed debt and paid on time. Also, typically when you surrender a home, the investor typically moves the balance into their "other assets" general ledger. They can't move this over until they actually have possession of the home. Now in a surrender...they have possession. They will still have to foreclose for title purposes, but they already know its there asset.

Now, I am not promising that this is exactly how "all" handle this, but it is what I am banking on. I plan on filing bk13 ( don't qualify for a 7) in nov or dec which means I may have to pay one last payment on each. I understand it is a waste of good money, but I am hoping that things turn out for me as I have seen for other people. All my other debts which are all unsecured will be paid at a 100% plan.

One last thing...on bk vs foreclosure. You can recover from a bk far quicker than you can a foreclosure.

If anyone has experienced differently, please advise...your input is always appreciated...I'm new here, but thought I would share that.

[Priapism]

Thanks.

Slight difference though - im filing Chapter 7.

So I assume reaffirming and paying debt is totally different than what Im doing which is surrendering the houses and walking away...

So in my case..... BK + 2 Foreclosures?

[busbis]

I would prefer to file a chp 7...I just do not qualify to do so. But it would actually work the same way. What I have seen, if you can afford to pay something outside your bankruptcy or all the better. Your scores will continue to show "on time" payments. That's why I wanted to file for a 7 because I was hoping to pay outside, but I'll settle for the 13. The problem with me doing a 13 is that I will have to pay my creditors through the trustee which in turn pays my creditors so I have no control on the timely payments. So what I am hoping to do is do a very early payoff and put all additional money to this plan. I hoping it will work.

[B12]

The answers are not all over the place, you are not listening.

Lender says be current up to BK date, pay the arrears and then they expect you to keep current on your mortgage. (like your lawyer said, keep making payments). Of course they are not going to foreclose. You are current.

Are you saying that another attorney told you something differently???

As far as will the FC and BK show up as two separate incidents, someone more knowledgeable will chime in here for you.

[Priapism]

Allow me to try and translate what I am hearing:

1) Keeping current on your payments before ***AND AFTER*** the BK is MANDATORY if you want to avoid a foreclosure showing on your credit with a Chapter 7 filing where the property is included in the surrender list. True?

2) According to HHM ("guru") here: http://www.bkforum.com/showthread.php?t=17098 Foreclosure/BK's show up as one item on your credit. So my question then is this: Why do people always say to me "You definitely dont want a foreclosure AND a bk on your credit! Try to just get the BK on your credit only. Having a Foreclosure there too, will be extremely bad!"

-P-

[SinkingFast]

There's basically only 2 legal ways for the Lender to take Title to the properties.

Deed In Lieu of Foreclosure. You offer and the Lender(s) accept a DIL. Which rarely happens.

Foreclosure. Foreclosure is the legal process for a Lender to take Title to the property out of your name so they can resell it.

In your case,............ You'll have 1 - BK and 2 - Foreclosures showing on your Credit.

Because the Foreclosures will occur as a result of you surrendering the properties in your BK, it will have the impact of 1 negative event on your Credit Reports.

Prospective Creditors, down the road, in the future will view the 2 separate incidents as 1 event.

If, however, you filed BK, did not Reaffirm, and several years down the road, decided to give a house back to the Lender, that would be viewed as 2 separate incidents.

[B12]

Thanks Sinking, even though there are other post on this, I didn't understand that until you just explained it.

[HHM]

Not to rain on this parade, but some clarification is in order.

When we say that creditors view BK and foreclosure as a single negative, what we mean is that when "Mortgage" lenders review your credit report subjectively (i.e. a person actually reads it), if the dates of the BK and foreclosure are close together, they will "understand" what happened. However, the foreclosure is still reported on your credit report and IS still a factor (a negative factor) in your credit scoring.

Also, the "single negative" theory really only applies to mortgage lending, other type lenders may not be as forgiving, especially those that are more score driven.