Answers
Which one is worse to recover from in terms of credit? Bankruptcy vs. Foreclosure?
I am on the verge of loosing a property of mine bcos the tenant has not been making their payments. I am trying to scrape up the money to catch up and prevent the house from foreclosure, however I want to prepare for the worst case scenario.
Best Answer:
Don't do either!!! If you are not past the point where you can catch up with the bank then get a loan and let someone put a lien on your house for it. Evict that tenant and move on. It's work and stress now but nothing compared to what you will feel as a result of a foreclosure or bankruptcy. Or if that is not an option to you then SELL that property now even if you have to take a loss on it. You'll be responsible for the remaining amount. Borrow it from the new buyer if you have to. Let them rent to own (running an ad in the paper for Rent to Own) even though you don't have the current renter out. Tell them to handle that. My point is that there are a lot of other options. Don't throw up your hands and quit just yet.
Answers:
Avoid Foreclosure!!!
There are a number of ways to rebuild and recover from a discharged BK. You can even get another mortgage with a discharged BK. But a foreclosure is kind of like the kiss-o-death to a bad credit situation.
Once again, avoid foreclousure.
well bankruptcy looks bad for seven years just because its bankruptcy.... but it eliminates everything else... file bankruptcy, a certain kind and take your tenants to court and sue the heck out of them.
FORECLOSURE---BOTH TAKE SOME TIME BUT IT IS BETTER TO SELL YOUR HOME FOR BALANCE GET YOURSELF STABLE AND SAVE FOR ANOTHER HOME...BANKRUPTCY IS A LAST DITCH EFFORT BUT SOMETIMES IS A TOOL TO STARTING OVER...BEST "CUT UP YOUR CREDIT CARDS" MOST FOLKS LIVE ON CREDIT CARDS AND GET THEMSELVES IN FINANCIAL TROUBLE...IT IS OK TO HAVE ONE FOR EMERGENCIES BUT NOT TO USE ON A DAY TO DAY BASIS....YOU ARE FOOLING YOURSELF.....THE BEST THING IS TO ASK THE THREE QUESTIONS: (1) DO I WANT IT? (2) DO I REALLY NEED IT? (3) CAN I AFFORD IT? IF ONE IS NO, DON'T BUY IT TILL YOU CAN PAY CASH FOR IT. YOU WILL GET YOURSELF OUT OF DEBT IN NO TIME...
foreclosure is worse because you cannot make a repayment plan. but bankrupcy only covers non secure debt your house is secure debt because you have the house as collateral.
1. call your bank and explain what is going on
2. evict the current tenents
3. get new good tenets
4. have your books done you need a years long cash flow statment and you also need a balance sheet or two done so that you can see how much cash is leaving when its leaving and when you might have to get a influx of money to keep you liquid.
sell the house before you loose it to pay off the loan rather than doing a foreclosure. Your going to better off in the long run than letting the bank get it back or doing a bankruptcy because they will still foreclose on the house that way as well.
If you can contact your bank and dont just tell them your problem, tell them how you plan to fix this problem. Most banks have departments that deal with borrowers behind on thier mortgage. They way the market stands right now, several banks are being downgraded on Wall Street because they are posting less profits due to more late mortgages. This information affects the banks stocks, and the share price of thier stocks.
With hundreds of millions of dollars riding on the price of the banks stock, the payments you are behind are nothing to this bank. You need to be prepared to lay out a plan of how to get out of the mess with the renters. The bank may agree to take the payments you are behind on, and add them to the back of the loan.
They both are going to hurt you. Try to sell the property before doing either.
This site has many reports that will most likely answer most of your questions -- www.paynotaxesforlife.com
Either looks bad on your credit rating.