Whats the difference between a foreclosure and a Bankruptcy?
Question:
TIA!
Answer:
Okay...two totally diffrent things. A Foreclosure is when a person fails to make payment on their loan for whatever reason and the the bank that holds the mortgage take back their property. Now there are two different kinds of Bankruptcy: chapter 13 are usually file when a person is about to loose their home if they are in the foreclosure process or the home is up for sheriff sale. Chapter 13 can re-organize their debt and they are REPAYING their debt and saving their home. You can place SECURED (homes, cars etc.) and unsecured debt in a 13. Now a chapter 7 is when you take your secured and your unsecured debt and get a fresh start by wiping away all your debt. you are not REPAYING NOTHING. Laws changed about 2 years ago. Student Loans cannont be placed in a ch 7. nor child support or any debt the is from a result of DUI. Consult with an attorney.
A forclosure is when your property is sold from under you because you can't afford to keep paying for it. Bankruptcy is when you lose everything you own to pay out your debts and can leave you with a bad credit rating.
Bankruptcy is a legal term saying a person or business can not pay debts. It's either voluntary filed in court by the person who can't pay or involuntary if filed in court by the creditor.
A foreclosure is loss of property due to inability to pay a debt. Processed through a court action by the debt holder of a mortgage for example.
See a lawyer or real estate person regarding particulars as to availability. The bankrupt person may be able to keep their property.
A foreclosure is where a creditor seeks to recover its debt secured by collateral, usually a house, through the sale of the house. This also would wipe out any liens, claims or encumbrances junior to that secured creditor.
If you filed a bankruptcy, the creditor must get relief from the automatic stay - meaning that the trustee in your bankruptcy case is not going to sell the property to pay creditors - in order to proceed. This would mean that there is no equity in the property which could be used by the Trustee to pay any portion of your unsecured debt.
If you filed bankruptcy, foreclosure isn't that much of an issue to you, but, of course, when the foreclosure is complete, you have to leave your home. If there is equity in the house, it is good for the trustee to sell it if you can't afford to stay since you might keep a homestead exemption. If you have no equity, you can live there rent free for a while until you are forced to move out.
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