What's the difference between Bankruptcy or Foreclosure?

Question

What's the difference between Bankruptcy or Foreclosure?

Answer 1

Bk is when you tell the court you have no money to pay your debts.

Foreclosure is when the bank takes your house away.

Answer 2

Bankruptcy is a legal proceeding in which people who cannot pay their bills can get a fresh financial start.  The right to file for bankruptcy is provided by federal law, and all bankruptcy cases are handled in federal court.  Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law.

Foreclosure is a process by which a lender regains a property which they have financed. Typically, this is because the borrower or homeowner is behind on house payments and is unable to catch up, often due to circumstances outside of his or her control. When the lender forecloses on the homeowner, the homeowner must move out of the house, therefore, losing all possession of the property and jeopardizing any possible equity that the homeowner may have in the home. There is a legal time frame, which varies from state to state, which determines how long the foreclosure process can take.

Note:The American Bar Association has reported that 96% of homeowners who declare bankruptcy end up losing their home to foreclosure anyway. Bankruptcy is very unlikely to help you save your home. If you declare bankruptcy you will likely end up with BOTH a bankruptcy and a foreclosure on your credit report.

Answer 3

foreclosure results from a specific document you signed in the past promising to pay for a specific piece of property (car, house, boat, land) under specific terms.  If you are unable or unwilling to meet these terms the the holder of the document (the lein holder) can take legal action to take possession of that specific piece of property (it does not affect other things you may own, money you may have or your income)  It is an action brought against you by another party.

Bankruptcy is an action YOU  take through the courts to protect your property, money and income from people you owe money to (usually because you are no longer able to pay all these debts) you have to prove certain things to the court and meet requirement of the court which may vary from situation to situation.  The federal government provides guidelines (refered to as chapters,  like chapter 11 or chapter 7) ((this is complicated stuff, you need an attorney to do this))

some of your things may go to help pay off your creditors and some things may be protected to help you make a new start.

Once bankrupt you will have a difficult time with anything financial for a long time.

Added information.  Some people think that they can protect a house from foreclosure by declaring bankruptcy.  This is not necessarily true.  If there is a mortgage on your house it might be foreclosed anyway.  This kind of question really needs a lawyer familiar with all your financial obligations.

Answer 4

Foreclosure is about personal property.

It's when the bank decides to take control over a property (car, house) that you took out a loan on, but are no longer able to pay it.

Bankruptcy is a legal process in which you declare yourself unable to pay any of your debts and in some cases give you protections under the law. There are many different types of bankruptcy but all are very nasty scars on your credit report that will basically say you're incompetent for 10 years.

Answer 5

bk includes personal debt foreclosure is just real estate.

Answer 6

Foreclosure is when you can no longer pay your house payments,so the bank closes the loan and demands that you pay the loan in full or get out. Bankruptcy is when you get protection from the courts from your creditors or the people you owe money to.Some times the debts are erased and some times there are payment schedules made to help pay off the debt.

Answer 7

Bankruptcy implies a fraud