Foreclosure or bankruptcy? Which is best option?
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You have a few options in this situation. First option is to consider renting/leasing the property so that you can better afford both payments until the market improves and you can get a fair deal on the other home you are trying to sell. Your second option is to try selling either on land contract or lease to own. There are many consumers out there who can benefit from this type of financing and you can usually get a little more for your home than you would have selling to a more traditional buyer. Option 3 would be to request a short sale on your home with your mortgage lender. With a short sale the lender agrees to accept a lower amount as paid in full to satisfy your obligation to them. This can take a little longer than a traditional home sale but can be well worth it for you and for the buyer. Both bankruptcy and foreclosure are going to be very negative on your credit. However, if you end up filing bankruptcy the other home will most likely still end up in foreclosure. You will have a hard time for at least 2 years and probably more likely 3-5 years at obtaining a good rate on a mortgage again. With bankruptcy if you have any equity in your current home the trustee could require you to obtain a equity loan or refinance and get the equity out of the home to pay as much of your debt as you can or they could end up selling your home to pay for some of your debts. I recommend one of the top 3 options though to preserve your great credit history. Best of luck to you as this situation is become increasingly common.
Get a renter in there or do a lease to buy type option for the renter. Bankruptcy is worse than foreclosure, but foreclosure is bad too. Sell it at a loss if you have to.that's probably your best option.
You do not want a foreclosure on your head. You will probably never get a mortgage again (or at least not for a very long time). Sell the house at a bargain basement price if necessary. Also keep in mind if the house is foreclosed and the bank does not get enough to cover the money owed, they can still come after you for the balance.
If you can't afford the payments on the house, then bankruptcy will probably be a bad option, since the bankruptcy will allow you to establish a repayment plan. That doesn't seem like what you're looking for.
Foreclosure isn't much of a better option, though, if you care about your credit record. If you've had just about enough of credit (which would be understandable), then it doesn't matter much what you do with the home. But there are better options than foreclosure, of course
Try a short sale to be able to sell the property for as low of an amount as possible. Or, if there's really no interest, try offering the bank a deed in lieu of foreclosure. That option isn't a whole lot better than a foreclosure, but it may keep the property from going through the whole foreclosure process, at least.
Good luck.
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