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Need a "Bankruptcy 101" crash-course as BK pertains to short sale, credit, etc ...

Posted by Mike Mondy on January 27, 2013 at 8:26am in Short Sale Discussions

I just got off the phone with a homeowner who told me it's too late to go the route of a short sale as he has already filed for Chapter 7 BK.  Not knowing what to say, I said "Oh, okay ... I guess that's that" (or something like that) and we ended the conversation.

I've looked briefly for similar conversations having to do with BK and feel that I'm still not quite understanding things.  From what other pros have said on here, it sounds like the Chapter 7 is still not going to end the homeowner's problems (especially concerning credit), is that right?  What advantages would this homeowner have to pursue the short sale with me?  What will happen if they just do the BK and not the short sale?

Thanks in advance for all tips and advice!

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Tags: 7, 13, bankruptcy, bk, chapter
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Replies

  • Ronna Janssen January 30, 2013 at 2:01am
    I just had one where the bank told the seller to put on the market. I listed it & 2 weeks later there was a sale date in another 2 weeks. I got a contract, sent it in, but the bank denied it because they wanted 10 business days & it was only 7. Took less than 24 hrs to deny. I'd like to know if there is any way I can retain listing & move forward with this sale?
    • Smitty > Ronna Janssen January 30, 2013 at 11:42am

      Ummmm.. If it's in BK then usually the bank can't foreclose unless they get the stay lifted.

    • Wayne Brooks > Ronna Janssen January 30, 2013 at 2:46am

      You'll have to get the sale date extended through the court.  Don't know the procedure and likelihood for your area.

      Also, which bank/investor as someone here will have better advice for a specific bank.  Maybe start a new thread with "Help with XYZ Bank...." as the title.  This may not get seen by all, buried in this thread.  PM the moderators, they have lots of knowledge and are always helpful.

  • Smitty January 27, 2013 at 1:28pm

    You can ss after BK is discharged.  You can start the process during, but lenders won't issue approval until discharge has happened.  The homeowner has to be on board and if you start the process "during' the ss, then the BK attorney should be on board too.  Ive found many BK attorneys not in favor of a ss.  They don't see any advantages.

    I believe BK stays on record 7 years.

    Here are some good articles

    http://massachusettsshortsales.net/2010/10/bankruptcy-and-short-sal...

    http://massachusettsshortsales.net/2012/10/how-does-bankruptcy-affe...

    http://massachusettsshortsales.net/2012/12/rebuilding-your-credit-a...

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