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Recently, the legal world has been debating about the filing of bankruptcy before or after the closing of the foreclosure. First of all, people facing foreclosure should not always opt for bankruptcy as it is not necessary that it is always the best option for them.
In case bankruptcy is the right option for you, some attorneys might recommend you to file for bankruptcy after the foreclosure of your home. Thus, you will be allowed to discharge your debt and will be able to move on with your life, although, your options might get limited.
Pre-foreclosure filing may allow you to fight the foreclosure after bankruptcy. Your interest in the property would be surrendered to the Trustee. The Trustee will then have the option of liquidating the mortgaged property. However, the Trustee usually disclaims the interests, as the mortgage is often more than the worth of the house. The decision of continuing the foreclosure, during or after the bankruptcy, then lies in the hands of the bank. You may be allowed to stay in your home even during the bankruptcy, although, it may affect your bankruptcy exemptions. During this time, you will not be making any mortgage payments. So, theoretically, you will be staying rent-free in the house. Thus, unpaid mortgage payments could help you to save thousands of dollars, depending on the duration of the bankruptcy. At the end of your bankruptcy case, you should be free of all your unsecured debts and should have savings that can be used for negotiating with the bank. In case your negotiations fail, you can simply walk
away, as you will not be personally liable for the mortgage any longer.
If you want to stay in your home even after filing for bankruptcy, contact the Recovery Law Group, for proper guidance and consultation on bankruptcy-related matters. They have the best and experienced bankruptcy attorneys who will help you in successfully navigating through the entire process.