What You Should Know About Bankruptcy

Some people will seek the advice of an attorney. An attorney is supposed to have all the answers right?? Not necessarily. Attorneys are experts in the law, only a few are experts in the financial aspects of real estate.

The attorney will tell some owners to file a Bankruptcy and that will protect them and solve all their problems. Bankruptcy DOES put a hold on things, but it will not stop the inevitable. It gives you a little time but the end result is almost always that the property will go to auction and now you have No house, plus a Foreclosure, AND Bankruptcy on your credit report.

What you should understand is that a lot of attorneys will push you to file a Chapter 13 Bankruptcy to stop a foreclosure. Bankruptcy will temporarily stop a pending foreclosure sale but it will only delay it. The foreclosing attorney for the lender will eventually file a “relief of stay” and the foreclosure will continue until you reinstate the loan, pay it off, or loose your house at auction.

What you should also understand: In a BK 13 you are placed on a repayment plan (typically 5 yr plan) for all your creditors. If you fail to make the payment plan as agreed, the BK trustee will have your bankruptcy dismissed and then most likely you will have to file a chapter 7 BK, and will loose your home anyway with a foreclosure and 2 bankruptcies on your credit.

What they don’t tell you is that a good portion of your weekly BK-13 payments are going toward the trustees and YOUR attorneys Fees! It does NOT go toward catching you up!! So while you are struggling to get caught up, your attorney’s fees are bleeding cash from your repayment efforts. Also while you are paying thousands a month to the plan, some of that money is going to the back payments on your mortgage. What about the interest on that past due money??? It is added to the pile of money you owe making your balance higher and higher to the point that you will be upside down on your home. The interest will accrue (go up) at an alarming rate. That means if your balance on that home is $100,000 and your payments are $850/mo, the majority of your payment is interest. After 2 years in the “repayment plan” your payoff on your home could be as high as $120,500!! Now you owe payments AND interest on $120,500 instead of the original $100,000. Bankrupcy is not a very good way of getting caught up, is it?

THERE IS NO MAGIC SOLUTION FOR GETTING OUT OF DEBT. Do not believe any one who tells you different. Keep in mind that a house is nothing but bricks and sticks. There are plenty of them out there and you can always find another when things improve. The stress caused from financial difficulties is the #1 cause of divorce and broken families. Do not let this happen to you.

In almost all cases, the best thing for a homeowner facing foreclosure to do is to SELL THE PROPERTY!!

We can bring your payments current, and in many cases even give you cash back out of the equity in your home. Every situation is unique. We can even help if there is no equity or you are upside down on your home! You may be able to stay in your home and lease/repurchase the property back.

I’m sure you have been contacted by every aggressive late night infomercial investor, especially if your bank has begun foreclosure proceedings. We will not try and take advantage of your unfortunate situation. We will go over your options and explain what we can do for you. 8 Point Property Solutions will never pressure you to sign anything. IF we cannot come to a mutually beneficial solution, we simply shake hands and part ways, no hard feelings.

When you are ready to discuss your options, call us now at 615-347-9198 or fill out our Owners Information Form and someone will contact you within 24-48 hours. ACT NOW and get peace of mind by knowing your options.