subject: Is It True That Foreclosure Can Eliminate Mortgage Debts [print this page] You might think that foreclosure is the answer to eliminate your mortgage debts. Well, there is bad news for you. You can still have mortgage debts after the foreclosure even if your home has been sold already.
You probably know already that a lot of homeowners can not save their home from foreclosure. Even if there are different government loan modification programs, most of the application for modifications were rejected by the big mortgage lenders. Did you know that the biggest US banks only approved approximately 4 percent of loan modification applications? It means more and more troubled homeowners have limited options to solve their problems.
Losing your home can be very traumatic emotionally. If you can put aside the emotional trauma, then your problems may not be over yet. You may still face financial burdens even after the foreclosure. There is a wrong notion that mortgage debts can be eliminated after the foreclosure proceedings. If your home has been sold for less than what you owe, then you have the obligation to fully pay the balance. You can incur a deficiency if the selling price of the property is less than the value of the mortgage.
The recession substantially deflated the prices of homes which could result to deficiencies. This is due to the poor state of the housing market. If you bought your home for $100,000 with a mortgage and it is worth $80,000 only today, then the difference is your deficiency.
The sad thing is that most mortgage lenders and banks will not forgive deficiencies. They will pursue you in order to recover their losses. Some of the steps that a mortgage lender can take against you include garnishing your paycheck, going after your savings in the bank, or threatening your car.
However, you must never lose hope even if you have a very huge debt. There are several solutions and methods that can help you to get out of the debt burden. For example, you can file for Chapter 7 bankruptcy. A Chapter 7 can eliminate your mortgage deficiencies and other forms of unsecured debts. These may include credit card debts, money you owe on medical bills, and payday loans.
After filing for bankruptcy and your debt has been eliminated, you will be able to finally get a sigh of relief. You will no longer face troubling calls from your creditors. You will also not face wage garnishments. Most importantly, your creditors can no longer threaten your properties and assets.
Chapter 7 bankruptcy filing should be considered carefully. It could help you and your family to get over with burdensome debts. You need to educate yourself about bankruptcy basics and issues. You can read frequently asked questions about Chapter 7, free publications from bankruptcy attorneys, articles, and posts from bankruptcy bloggers. It is easy to get free information today about bankruptcy.
Free legal consultations about bankruptcy are generally available. The consultations are provided by independent lawyers and large firms. You can get valuable advice and critical information even before you meet with your lawyer.
Is It True That Foreclosure Can Eliminate Mortgage Debts
By: Rob Blake
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