any opinions on this?

[technoreid1]

Our home is going to be foreclosed on by the bank, but we have not yet received a notice of default yet (which in California would give us 115 days to vacate (walk away from) the property from the time the NOD is filed with the county recorders office.

We also have 85k in credit card debt.

Should we file Bankruptcy BEFORE we get a notice of default (on our home) or AFTER we receive a notice of default?

Our attorney has said that we could do it both ways but says it's best to file a bankruptcy (CH7 or 13) before we get the notice of default because then the mortgage company WILL NOT be able to even file the notice of default and that the mortgage company would HAVE to go to court and get what's called "Relief From Stay" --- Which our attorney said they MIGHT NOT even do that which would possibly give us more time in the home to save $ so that we can rent.

Anybody have any opinions on this. I would really like to hear from you!

thanks, rrp

[HHM]

Strictly speaking, it really doesn't matter when you file relative to the NOD.

But, if your goal is to stay in the house as long as possible and live rent free until the foreclosure is complete, then your attorney is probably correct, file BK before the NOD is filed.

[technoreid1]

Thanks for your response! I really appreciate it. This forum is great! (and I know none of this is legal advice)

So the way I take it is this: (please correct me if you think I am wrong)

If we file a BK before the NOD, the mortgage company will go to court to lift the automatic sometime after the filing of the BK, and then start the foreclosure proceeding (which is about 115 days to sale in California) while we are in our CH7 bankruptcy....

hypothetical below....
So that if we were to file our CH7 BK on say Nov 20th and our bankruptcy was discharged Feb 20th...(3 months later)

** but our mortgage company GOT THE STAY LIFTED and started foreclusure procedures on Dec 20th which would allow us to stay in the home for 115 more days....

****Our BK would be discharged Feb 20th but we would still be able to live in the home until the sale date of the home which would be like May 5th??

I guess what I am trying to get at is even though our BK would have been discharged Feb 20th, would we be able to still stay in the home after our BK discharge date because the lender would still have to foreclose on us according to CA laws?

Would the BK trustee have any say in this matter?


Thanks, rp

Strictly speaking, it really doesn't matter when you file relative to the NOD.

But, if your goal is to stay in the house as long as possible and live rent free until the foreclosure is complete, then your attorney is probably correct, file BK before the NOD is filed.

[HHM]

Yes, regardless of the BK, you can stay in the home until the Deed changes hands, which doesn't happen until the foreclosure date.

So, for example, lets assume the bank does not lift the automatic stay and simply waits until after discharge to begin foreclosure, you would have that 115+ days to live in the house after your BK is complete.

[technoreid1]

So the bankruptcy is totally independent from the foreclosure.
I thought for some reason they kind of went hand in hand....
I guess I felt this way is because our home is listed in our bankruptcy paperwork. So the BK trustee cannot "speed up" the foreclosure?

Is it pretty rare for the mortgage company to not lift the automatic stay and simply wait until after discharge to begin foreclosure?

My attorney said there is a possibility of this happening. I would think not..... but I do not know?

thanks, techno

Yes, regardless of the BK, you can stay in the home until the Deed changes hands, which doesn't happen until the foreclosure date.

So, for example, lets assume the bank does not lift the automatic stay and simply waits until after discharge to begin foreclosure, you would have that 115+ days to live in the house after your BK is complete.

[poorme]

even after the sale and deed exchange, you can stay and force the eviction process - extending your stay even a bit longer. Just be prepared (and packed) to leave quickly before the big guys show up.

It is rare, but not unheard, for the mortgage co to wait - they have to file for the MLS in order to protect their interests, but a good attny can always ask for and usually get one, maybe two reschedules if there's reasonable cause such as illness/hardship, etc. There's no negative impact to you in doing so.

[BassBoy]

So the bankruptcy is totally independent from the foreclosure.
I thought for some reason they kind of went hand in hand....
I guess I felt this way is because our home is listed in our bankruptcy paperwork. So the BK trustee cannot "speed up" the foreclosure?

Is it pretty rare for the mortgage company to not lift the automatic stay and simply wait until after discharge to begin foreclosure?

My attorney said there is a possibility of this happening. I would think not..... but I do not know?

thanks, techno

Yes. The BK and the foreclosure are two seperate things. The Trustee is not involved with the foreclosure if he/she abandones the property, which means the Trustee has no interrest in siezing the home and selling it himself/herself to pay off your debts. This is rare, so don't dwell on this too much.

Nevertheless, the foreclosure will proceed as normal, so be prepared when the end is near. You will receive a lot of documents throughout the foreclosure process and you'll know when the time is nearing when you'll have to leave. What I would suggeest to you and anyone else facing foreclosure, is to do what you can to be out of the house on or before the sale date. IMO, it's worth the piece of mind to not have to worry about when the Big Boys will show up to evict you.

[technoreid1]

Thanks for your advice! You have cleared a lot of things up in my mind. : )

We need more time to save more $ so that we can rent a place we like. (although I heard it could be hard to rent once we are actually in a BK) and are trying to gauge the time frame. On top of all this we are getting sued by CC's. + Our house is upside down by 50K-70K.

Our mortgage company has not yet filed a NOD (I checked on it at the county clerks website + I am sure I will get something in the mail or be served)... and it has been 4 months already since we could make the last payment. (don't know why they are taking so long - but it's a blessing in a way.

We just want to move on with our lives.... And it's difficult staying in the house we know we will lose... And it's just a matter of time...

We actually are trying to rent a very cheap place now (we really don't like it but they will accept our pets) but that really makes NO sense because they have not filed the NOD + we are filing a BK very very soon. And this extra time (minimum of 3 more months) could give us a chance to save more....

We are emotionally stuck between:

#1. Waiting here in our home for the next 3 months (at the very minimum) and saving more $. And who knows? It could be 4-5 months.....

VS.

#2. Moving out now into a place we have found but do not like (cheaper home in worse area) but will take all our pets.

I hope I made sense.

Thanks, techno

Yes. The BK and the foreclosure are two seperate things. The Trustee is not involved with the foreclosure if he/she abandones the property, which means the Trustee has no interrest in siezing the home and selling it himself/herself to pay off your debts. This is rare, so don't dwell on this too much.

Nevertheless, the foreclosure will proceed as normal, so be prepared when the end is near. You will receive a lot of documents throughout the foreclosure process and you'll know when the time is nearing when you'll have to leave. What I would suggeest to you and anyone else facing foreclosure, is to do what you can to be out of the house on or before the sale date. IMO, it's worth the piece of mind to not have to worry about when the Big Boys will show up to evict you.

[HeatherB]

Renting after bk....

I filed bk and gave up the house. I went apartment shopping (just the places listed on apartments.com) and found very very few that would hear me past the word "bankruptcy". However, not everyone said that. A few said, "it just depends".

Also, the lady at the leasing office in the place we are moving to (in about a week) said that sometimes the bankruptcy hasn't shown up in the credit reports yet and it's a little loophole. She said that they could "pre-screen" me at the time and then I could wait a few month before actually moving in. This is what I did. And they passed us - but with a large deposit.

You may be more interested in looking for a house for rent rather than a large apartment complex. Owners of rental houses do the meet and greet and are more easily swayed by personal impression than just a plain 'ole credit rating. (provided that you don't have a previous bad rental history)

A suggestion made to me was be upfront about your bankruptcy before paying for them to run you for screening. That way if they do automatically deny you, you're not out the fees.

Good luck!

[technoreid1]

Thanks for your insight!

If I may ask how long did you get to live in your house with no payment?

And also how long did it take you to find a rental?

(I have talked to a couple individual owners and they seem to be the most open to renting to us)

thanks, techno

Renting after bk....

I filed bk and gave up the house. I went apartment shopping (just the places listed on apartments.com) and found very very few that would hear me past the word "bankruptcy". However, not everyone said that. A few said, "it just depends".

Also, the lady at the leasing office in the place we are moving to (in about a week) said that sometimes the bankruptcy hasn't shown up in the credit reports yet and it's a little loophole. She said that they could "pre-screen" me at the time and then I could wait a few month before actually moving in. This is what I did. And they passed us - but with a large deposit.

You may be more interested in looking for a house for rent rather than a large apartment complex. Owners of rental houses do the meet and greet and are more easily swayed by personal impression than just a plain 'ole credit rating. (provided that you don't have a previous bad rental history)

A suggestion made to me was be upfront about your bankruptcy before paying for them to run you for screening. That way if they do automatically deny you, you're not out the fees.

Good luck!