Pros and Cons of All Your Options When Facing a Michigan Foreclosure

Pros and Cons of All Your Options When Facing a Michigan Foreclosure

If you’re facing a Michigan foreclosure, there are many reasons why you may be feeling overwhelmed right now. For one, you most likely have a hardship that is making it impossible to meet your financial obligations. You also might be overloaded with information. While it’s important to be informed, too much of a good thing can be confusing. In an attempt to make the big picture much easier to take in, I’ve created a table that shows the options you have when it comes to foreclosure, and the pros and cons of each.

Option Pros Cons
Do nothing -You don’t have to do anything -Your lender may still have the right to come after you for all the money they lose on the house
-Your will have a foreclosure on your credit
-You will be removed from your house by a court order
File Chapter 13 Bankruptcy -The foreclosure process will be slowed -The foreclosure will still happen if you are unable to make the payments order by the court
-You will have to pay attorney fees
-You will have to appear in court and the bankruptcy will be public record
-You will have a bankruptcy on your record (further damaging your credit)
File Chapter 7 Bankruptcy -You will not have to repay your debts -If you have equity in the house, it will be sold to pay debts
-If you do not have equity in the house, it will be foreclosed on
-You will have to appear in court and the bankruptcy will be public record
-You will have to pay attorney fees
Loan Modification -Your bank may give you a lower interest rate
-Your payment may be reduced
-If successful, you would get to keep your house
-97% of loan modifications do not make it past the trial period
-Though your payment may be lower, you still may not be able to afford to make it
-Have to deal with your lender
-Have to fill out paperwork and submit financial documents
Deed-In-Lieu of Foreclosure -You may receive cash from your lender
-Process may be quick
-Your lender may still have the right to come after you for all the money they lose on the house
-You will still have a foreclosure on your credit
-You may have to leave your house quickly
-Have to deal with your lender
Short Sale – May prevent your lender from coming after you for any money in the future.
-Your house can be sold even if you owe more than it is worth
-Can save you from having a foreclosure on your credit
-Can take time
-Have to deal with your lender (unless we are involved)
-Have to fill out paperwork and submit financial documents

While we can’t help you with bankruptcies, modifications, or deeds-in-lieu, we can help you tremendously if you think that a short sale is right for you. We’ll even take some of the pain away from the cons – we’ll do all of the talking to the bank, and do all of the confusing paperwork for you (we’ve done it so many times that it’s not even confusing anymore!) If you’re not sure which option is best for you, give Emily a call. She’d be more than happy to discuss your options with you, and help you decide which is best.

Holly

-You don’t have to do anything
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