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Postponing the Inevitable

Postponing the Inevitable

Now that summer is upon us, my dogs love to go swimming in the lake. However, they hate being dried off afterwords. I won’t allow them back in the house until they are semi-dry so it becomes a battle of wills. I pull out the towels and they run away, postponing the inevitable. Sometimes it becomes a game (to them anyway) with me chasing them around the garage jumping over obstacles while they gleefully run away. Eventually, hunger or the search for affection and companionship will pull them inside and they will have to endure the towel drying to get to their food or other goal.

We see a lot of people facing a Michigan Foreclosure go through a similar mental process. They want to avoid the pain of the foreclosure, so they may declare bankruptcy. I am not an attorney, but my experience has been that all the bankruptcy does for them is postpone the inevitable foreclosure. Yes, it makes your lender jump through a few more hoops to proceed with the foreclosure. However, eventually, they will do all the right legal things to be able to proceed. I have never seen a bankruptcy permanently stop a foreclosure.

If you are in a distressed financial situation and are considering bankruptcy, seek competent advice. My experience is that it probably is not worth pursuing the bankruptcy unless you have debt other than the house that a bankruptcy can help you with. If the house is your sole financial burden, give us a call and see what alternatives we can suggest. We can help you define your goals and find the best course of action for your situation. We will never charge you a fee and we promise not to put you in a worse. Give Emily a call today and stop postponing the inevitable and start working toward a permanent solution to your Michigan foreclosure.

Ann

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Bankruptcy vs. Short Sale

This week I got a call from Dan and Betty with a beautiful Four bedroom house in Kentwood Michigan. They are facing a Michigan foreclosure and wanted to know if they should consider a bankruptcy or a short sale. I get this question almost every week as it’s something that should be carefully considered.

Of course, I’m not an attorney, so I can’t give legal advice. Most families facing foreclosure have no money to pay an attorney, so I’m forced to give them something to think about. Perhaps this will help you too.

If you’re contemplating the same decision, ask yourself this simple question: “If it weren’t for the house, would you still consider a bankruptcy?” In other words, do you have other debt you need to rid yourself of?

If the answer is “no” (like most families I talk with), you’ll likely decide to see what we can accomplish with a short sale first (at no charge of course). After all, if we get all of the debt forgiven, you’d have no reason to spend the time and money on the bankruptcy right? Did you know that bankruptcies are also public record? Most families would rather avoid that embarrassment unless they have no other choice (additional debt). Consider also that you can only file a chapter 7 bankruptcy once every 7 years and you need to decide if you want to “play that card” now, or hold on to it for a more urgent hardship.

If we can’t get the short sale done (we have about an 80% success rate when a qualified buyer is found), and the lender seeks a deficiency after the foreclosure, then you can consider filing for bankruptcy.

Of course if you do have additional debt that you can not live with, now is the time for you to make an appointment with a bankruptcy attorney so you can look at the pros and cons of going that route. Of course I can refer a good one to you (not someone who simply is going to try to “sell” you a bankruptcy.

Still confused? Give me a call and I’ll do what I can to help.

Emily

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Well Underway Onto Fresh Start

This past weekend I ran into a family that we helped out with a short sale earlier this year. I was happy to see them, but even more than that, I was thrilled to see how well they were doing with their fresh start. They said that they were renting a beautiful home (larger and cheaper than the one we helped them stop foreclosure).  Now that the pressure of the foreclosure from their previous house was off their shoulders, they were able to start over again with a clean slate and were so grateful for the opportunity to do that.

They are rebuilding their credit, avoided a Michigan foreclosure or bankruptcy and couldn’t stop thanking me for helping them remove all that stress and to start over.

I’m so glad that I have a career that allows me to help so many people through one of the toughest financial decisions that someone has to deal with. If you find yourself in a situation where you can’t make the house payment anymore, give me a call. I’d be glad to discuss your options with you.

Emily

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Let’s Talk Bankruptcy and Foreclosures

Something so significant happened this week that I had to blog about it. It has to deal with Bankruptcies and how they relate to foreclosures. Specifically, a Chapter 7 (complete wipe out of debt).

Keep in mind, I’m not an attorney as I go through this.

I started working with two homeowners this week, each who thought their bankruptcies would prevent a foreclosure on their credit. Let’s start with the basics.

A Chapter 7 gives you the option of putting the house into the bankruptcy or not. Keeping it out means you’ll keep paying on the house and be able to keep the house. Both of these families decided to not keep the house (they were behind on payments and owed more than the house was worth – a typical scenario).

The job of the bankruptcy court is to sell all of your assets, take (most of) the proceeds and split it up between the people you owe money too – yes, this is simplified, but that’s the general idea behind it.

When you owe more than the house is worth, after filing the bankruptcy, one of two things are going to happen:

1) The bankruptcy court will look at what you owe on the house and what it’s worth. They’ll then conclude they won’t make any “proceeds” from the sale, and release the house from the bankruptcy.
2) The lender will petition the court to release the house from the bankruptcy. They’ll claim it’s worth less than what you owe, and they want it released so they can foreclose and cut their losses.

Either way, the house comes out of the bankruptcy and the lender completes the foreclosure process.

Here’s the problem: Most bankruptcy attorneys don’t tell their clients that at the end of all of this, they’ll have a bankruptcy and a foreclosure on their credit. Why is this important? Most people can get a home loan after a year or two out of bankruptcy (some lenders can do it immediately after – at a higher interest rate). The point is, though, with just a bankruptcy, you can be a homeowner again fairly quickly. But, with the foreclosure on their credit (which stays for 7+ years), buying a new home in the next 5 years is almost impossible.

Why don’t attorneys tell their clients this? Well, you can make your own opinion. Just ask yourself this, if you knew what I told you above about your credit and the foreclosure, would your bankruptcy attorney get any money from you? ‘Nuf said.

So, what do you do? If you’re considering bankruptcy, get our team involved before you file. We’’ll work with your bankruptcy attorney and we’ll develop a plan to stop the foreclosure from being placed on your credit. If you wait until 3 weeks before the foreclosure (like the two families I started working with this week), I can still try, but the chances of success are much less.  Don’t delay, call us today (hey, the rhymes!)

Joel

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Short Sale or Bankruptcy?

Many families are struggling with this question when facing a Michigan foreclosure. Remember, I’m not an attorney, so I can’t advise you which is best for you and your family.

I have ask a simple question to help you decide on your own what direction to start in:

“If it weren’t for the foreclosure, would you still consider the bankruptcy?”

More often than not the answer will be “well, no”.

I suggest you consider trying to sell the house on a short sale. If we’re all successful with working with you on this, and we stop the foreclosure and save you from putting a bankruptcy on your credit, why not give it a try? Also consider that filing for bankruptcy could cost you thousands of dollars while working a short sale with us won’t cost you a dime.

If you are seriously considering a bankruptcy, before meeting with a bankruptcy attorney, be sure to write out these questions and ask them all at your first meeting.

Give me a call and I’d be glad to discuss your options with you!

Emily

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How Does Bankruptcy Affect My Ability To Get A Loan?

“How Does Bankruptcy Affect My Ability To Get A Loan?”

This is a common question we get when people are facing a Michigan foreclosure and considering attempting a short sale.  Keep in mind that none of us are attorneys and you need to consult with one if you are considering filing bankruptcy.

The timing involved to get a new mortgage has many factors and no one can tell you exactly how long it will take because loan guidelines are constantly changing.  Here’s what my understand is, in order from bad to worse.

1) Chapter 7 Bankruptcy (BK-7), leave the house out, keep making payments on the house.
2) BK-7, put the house in, attempt to avoid the full foreclosure by selling via short sale*
3) BK-7, put the house in (this will still lead to a foreclosure)
4) BK-7, leave the house out (this will still lead to a foreclosure)

If you can’t afford to do #1, why not at least attempt #2?  It can’t hurt, and if #2 fails, by default you’ll be at #3.

Leaving the house out of the BK-7 means the lender will be able to come after you for the amount of money they lose on the house.  I don’t see why anyone would want to leave a house out of a BK-7 unless they intend to keep it long-term and you have some equity in it (that’s #1 above, which of course you need to be able to afford).  Most people can’t afford to keep the house and have no equity because of the rate at which values are declining in Michigan.

* A short sale is when the lender agrees to accept less than the full balance.  Of course this is our specialty which we do not charge for.

Joel

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7 misconceptions (and truths) about attorneys, Realtors® and Mortgage Lenders

Learn the 7 misconceptions (and truths) about attorneys, Realtors® and Mortgage Lenders and how they relate to possible solutions (or not) to your Michigan Foreclosure. Watch this, take the time to think carefully before choosing one of these professionals.

Emily

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How To Avoid The 6 Biggest Foreclosure Traps

Here’s a short video on how to avoid the 6 biggest foreclosure traps.  So many people fall into these and I’d hate to see you fall into any one of them because of the devastating affects I know they will have on your family.

Emily

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