Short Sales Help Homeowners Avoid Foreclosure

This is an article from last year about Short Sales. While the market has change, the concept is still the same: Selling Short hurts, but not as much as foreclosure.

If you want more information on Short Sales & Bank-Owned Properties, visit Understanding Foreclosures Las Vegas.

Foreclosure and Bankruptcy

RealtyTrac has great information regarding how bankruptcy can sometimes save your home from foreclosure:

If you file for personal bankruptcy under Chapter 7 a so-called "automatic stay" is placed on all your creditors, including the foreclosing lender, by the court. HOWEVER, the stay is only a temporary fix to the situation.

Chapter 7 never permanently stops home foreclosure. It only gives you relief from unsecured creditors like credit cards and prevents certain creditors from pursuing collection action against you. It does NOT discharge debts such as taxes, child support, alimony or student loans, nor can it give you relief from other secured creditors — like your lender — whose debt is secured by the home you're living in.

In fact the "automatic stay" is only effective so long as the court wants it to be in place. At any time the court can grant your lender's motion for "relief from the automatic stay." Once the court grants that motion the foreclosure against your home can proceed to conclusion.

One viable exception does exist, however, by filing for a Chapter 13 bankruptcy. Under Chapter 13 you are allowed to sit down with your creditors and arrange a payment plan to pay back what you owe them over a given length of time and usually on a lower payment schedule. Once accepted, the creditors, like your lender, must abide by the terms of the plan.

…In essence, then, through a Chapter 13 debt reorganization plan you can cure the default and save your home. However, you must realize up front that not everyone qualifies to file for bankruptcy. There are certain threshold qualifications that must be met which were tightened up when the U.S. Bankruptcy Code was revised a few years ago.

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If you want more information on Short Sales & Bank-Owned Properties, visit Understanding Foreclosures Las Vegas.