Bankruptcy or Foreclosure?

Question

My thought is if you're going to mess up your credit, wipe the slate clean, but what is best, filing bankruptcy or letting the bank foreclose and walking away from the house? They both hurt your credit but is one worse than the other?

Answer 1

Well you have to keep in mind too that when filing bankruptcy, you could lose any things you have that you owe on. Cars, tv's, jewelry, etc... Filing bankruptcy does not grant you "free stuff", they take it all back to make the lenders loses as minimal as possible.

So keep that in mind.

Foreclosing... best to avoid it all costs. You're going to need to reside somewhere, why not your home. If it means trading in a car for a cheaper one, so be it. If it means defaulting on credit card payments, so be it. Settling on credit cards debts and losing accounts is a lot less credit crunching than a foreclosure or bankruptcy... you really need to out weight your pros and cons in every aspect.

Answer 2

Maybe I answered this for you already...the name looks familiar.

Check with a lawyer.  Bankruptcy laws have made lots of changes and it no longer "wipes the slate clean."  What both do is make a mess that will follow you for the rest of your life.

Answer 3

When the bank foreclose, you are billed a deficiency balance, so filing a bankruptcy is the only way to stop this from taking you to court to sue, garnish wages and/or bank accounts. Simple....If the house is foreclosed, you pay the balance, if not, they sue, you file bankruptcy and it stops them from garnishing anything. Both hurt your credit, at this point, it really doesn't matter which one hurts the most. The foreclosure and other debts if you have and aren't paying, are on your credit report 7 years. A bankruptcy filing is on there for 10 years. Depending on what you qualify for...chapter 7 you can re-build credit after the discharge...full chapter 7 takes about 4 months to complete...Chapter 13 runs 5 years and you slowly re-establish over that time frame, but it's a long haul....Per your last question, I sent you a website to view the difference between the two. You need to contact a good bk attorney to see what you qualify for. Good Luck!

Answer 4

It depends on your situation.

If you do a bankrupcty, they can still foreclose. It just delays it a bit.

If they foreclose and you still owe them money, you still have to pay that back.

The difference is that with a Bankruptcy, they can't get any more money out of you.

Answer 5

Hi,

I used "Credit Solution" to settle my debt and avoid bankruptcy.They managed to reduce my debt up to 58%.I came across this company on NBC News Special Edition.Check it out here:

http://urlhawk.com/29x

Answer 6

go bankrupt ist the best i had £30,000 debt and it cost me £400 to do it now im happyer than ever it lasts 12 months however i am struuglng to open even a basic bank account i only have a post office one at the moment