You are not alone—and you have options.Are you a property owner caught owing more on your property than you can sell it for? Or, can no longer afford the monthly payment? Have you tried to restructure the loan to no avail? You are not alone and you have options.
Recently I sat down with David Cain of Cain & Herren Attorneys at Law, who practices bankruptcy law. He answered questions that I am asked each week by potential clients: “Should I just walk away and foreclose?” Or, “Should I do a short sale?”
David explained what some of the consequences are to these options:
Short Sale: The seller receives a purchase price less then the loan amount. This needs to be approved by the lender, and may lead to a 1099 tax consequence for the borrower.
Foreclosure: The borrower stops making payments on the loan, the lender takes back the property and can put a judgment lien on other assets to receive compensation for the lenders loss.
Deed in Lieu of Foreclosure: The lender agrees to take back the property and the property owner walks away from it. Again, this needs to be approved by the lender.
Bankruptcy: There are a few different types. David discussed Chapter 7, which allows all debts to be removed. Assets are also removed and the Chapter 7 filer gets to start all over—no debt, limited assets. Chapter 13 is a restructuring of debt and repayment program. Some debt may be released, some assets remain, and some debt is repaid.
Before you make a decision regarding your property, call an attorney specializing in these issues so you can make the best decision for yourself. Cain & Herren offer free consultation to discuss options regarding bankruptcy, foreclosure and short sale. Reach them at 242-9350.
Chris Bakeman, broker, has been a realtor since 1997, selling in both buyers’ and sellers’ markets. Now with her own company, she offers an affordable way to sell your home starting as low as $4,000 full service on the MLS. Contact Chris Bakeman Realty LLC at 283-6126 or www.chrisbakeman.com.