Must you file bankruptcy if filing foreclosure?

Question

The house is worth $250,000 the loan is $300,000. $8000 behind on mortgage payments. (I have only $6000 debt). Will the mortgage company try to collect on the $58,000 difference if I file foreclosure? Because I'd rather go through bankruptcy in that case.

Answer 1

Yes, they will collect on the balance due on the loan. If not paid, then they can and will sue you, get a judgement, garnish pay checks and/or bank accounts, the only thing that stops a judgement is a bankruptcy filing. Good Luck!

Adding to the second post, which is great advice...a bankruptcy attorney will see you as well on a first free consultations..way your options as posted.

Answer 2

Yes and it could be worse.  You owe $250K but what would the home sell for in today's market?  Say the lender takes the property back you can count on another $15K in Atty fee's.  Now you are at $265K and the property goes on the action block but only brings in $200K as the highest offer.  The bank accepts rather than deal with additional cost to carry the property.  You would now be responsible for the $65K.  Your one saving grace is the new laws that Bush signed.  You maybe able to refi this after Oct 1 into a new FHA program even with the late payments if they came after a rate adjust.

Speak with a good Mortgage Broker and a BK Atty and see what each has to offer.  The Broker will do it for free so maybe start with this person first.