Bankruptcy can usually only temporarily stop foreclosure. If you don't have the ability to reorganize under Chapter 13 bankruptcy and catch up on your mortgage payments, and the bank forecloses anyway, you'll have both on your credit. If you're facing foreclosure, you may want to see if your lender will allow you to surrender the deed (Deed In Lieu), which will be a little less hard on your credit. Bankruptcy and Foreclosures both stay on your credit for 10 years, if you have both, its a double whammy. Also, if your lender forecloses and they sell for less than you owe, you may get a tax bill from the IRS on what the IRS will consider as capital gain (i.e. Mortgage is $100,000, lender auctions for $80,000, you get a bill from the IRS for taxes on $20,000). Sometimes the lender will work with you on this if you give them back the deed in lieu. AND if you file Chapter 7 Bankruptcy, depending on the state, you can keep your house if the payments are current. Good luck on whatever you decide.

REMEMBER I AM NOT A LAWYER: I have done BK/federal court work for 8 yrs now and for the last 2 I have worked the BK dept at a Foreclosure firm. Bankruptcy (your first filing) will put an automatic stop to any and all FC proceedings IMMEDIATELY. If you file a Chapter 13 (reorganization) you will pay any mortgage arrears that you owe at the time of filing to the Bankruptcy Trustee through a plan and they will pay the late pmts to the bank - if you do not make your plan pmts your BK will be dismissed almost immediatley and the FC can proceed immediately. If you continue with your plan pmts to the trustee and in addition make your full monthly mortgage pmts on time you will be able to keep your house no problem and pay the late pmts you owe etc. If you make your plan pmts but not your mortgage pmts the Bank will file a Motion for Relief and get permission from the court to proceed with the Foreclosure - usually with a 10 day stay in effect then the bank is free to begin FC'ing on your home. A chapter 7 BK (will stop the FC process)means in order to keep your house you need to pay EVERYTHING you are behind on to the Bank to keep them from filing a motion for relief - sometimes they will have you pay double pmts through an agreement filed with the court or a stipulation. but if default and miss any of those pmts they will seek relief and usually will get it so they can foreclose. A chapter 11 BK is if you are reorganizing a big business or have millions worth of real estate/property. They are much more complex and Im guessing you will not be filing under this Chapter. Chapter 12's are rare - for farmers usually. As long as you keep your pmts up in any chapter BK you will be able to keep the house and the bank cannot FC without the courts permission. Just make your pmts. Both kill your credit. FC will make it more difficult to get a Mortgage ever.

Bankruptcy is a legal proceeding in which people who cannot pay their bills can get a fresh financial start. The right to file for bankruptcy is provided by federal law, and all bankruptcy cases are handled in federal court. Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law. Foreclosure is a process by which a lender regains a property which they have financed. Typically, this is because the borrower or homeowner is behind on house payments and is unable to catch up, often due to circumstances outside of his or her control. When the lender forecloses on the homeowner, the homeowner must move out of the house, therefore, losing all possession of the property and jeopardizing any possible equity that the homeowner may have in the home. There is a legal time frame, which varies from state to state, which determines how long the foreclosure process can take. Note:The American Bar Association has reported that 96% of homeowners who declare bankruptcy end up losing their home to foreclosure anyway. Bankruptcy is very unlikely to help you save your home. If you declare bankruptcy you will likely end up with BOTH a bankruptcy and a foreclosure on your credit report. http://www.mortgagebuyerbasics.com/faq-category-1 http://blogs.avoid-homeforeclosure.com/

Okay I need some help. I want to make sure I understand. My situation is I have a house in New York which has become a rental property as I have bought a townhouse and live in Georgia. I have lost a lot of money on the house in New York because of tenants not paying rent, the cost of maintenance and repairs. I have cleaned out all saving and maxed all credit. I will not be able to maintain so I now a trying to decide the best step to take. My understanding is if I do a deed-in-lieu I sign the house back to the bank the problem I have is I have a $37,000 line of credit not secured by the house and I assumed when I took the loan I could pay it back when I sold the home. But now the home is worth over $150,000 less then when I took the loan. I have also been told that I should just go ahead and let it be foreclosed on because then I can try to collect some rent while the foreclosure process goes through. I was also thinking of filing bankruptcy too to help wipe out the line of credit and credit debit. My main concern is I want to keep my house and car in Georgia. Can someone please help with which would be better as far as deed-in-lieu vs. foreclosure and if I should just try to dig myself out of debt or just go ahead and file bankruptcy and then when before I get rid of the house or wait till the house is gone. Thanks!