Foreclosure Question

[Teddy]

Does anyone know how much worse it is to have a foreclosure AND a bk, vs just a bk?

[HHM]

It depends.

But frankly, if you are facing a possible foreclosure, your future credit is the last of your concerns. You need to make the very practical decision, CAN YOU AFFORD THE HOUSE, if the answer is no, you won't really have a choice. You would be an idiot to keep a house that is draining you financially (and especially if you are upside down on the house) just for the sake of not having a foreclosure on your credit report.

Generally, when a lender does a subjective analysis of your credit report (i.e. the loan officer actually looks at it) and they see a BK and foreclosure occur around the same time, they understand that the 2 events occurred simultaneously, and therefore, they don't really ding you for that.

[sharksfan]

Does anyone know how much worse it is to have a foreclosure AND a bk, vs just a bk?

Check out creditboards.com. There are multiple posts on this topic...

I'm facing the same situation. From what I gather... creditors can only report your 'pay status' at time of filing, and can only indicate that your debt was included in bankruptcy. Once you are discharged from your mortgage, the lender will foreclose. However at that point it's not your foreclosure which is nothing more than a legal preceding for the lender. If your lender dings your CR with a foreclosure AFTER you file, dispute it!

YMMV

[Teddy]

Thanks for the link sharksfan, I'll check it out.

Edit: Are you saying that if my home is included in BK it won't show as foreclosed on the credit report?

HHM - I can afford the payment with no problem, but an opportunity has arisen for us to possibly move into a house that would suit my family better now that I have gotten married. My house is too small and with the way our kids either live with us and/or come visit, the house is just not big enough.

I would not make any money if I sold it, so my attorney said let it go in the BK. But then I worried about the foreclosure showing up and making my credit worse. So it sounds like if it goes hand in hand, it's not quite as bad.

The opportunity we have (hopefully) would be pretty much renting or land contract from my husbands friend. I'm not sure he wants to do this but if he does, I want to surrender the house and move. My husband was thinking of renting it from friend for at least 2 years then get a mortgage and pay him the balance.

So basically, if we do get this other house, I quit paying my mortgage and either stay at our house for a couple months until discharge, or just move. Then when the BK gets discharged, the house will forclose per the bank.

Ok, should I worry about them NOT discharging my BK?? I just thought as I was typing, what if we move during the BK and then it doesn't get discharged? Then I'd be in a mess.

I think too much, I know. This is driving me insane!