Should You Let a House Go into Foreclosure when in Bankruptcy?

Author Information

Christy Thompson has 36 Published Articles

United States of America,
AZ,
Chandler,
1311 W. Chandler Blvd.,
Suite 220

Should You Let a House Go into Foreclosure when in Bankruptcy?

Posted On : Dec-24-2010 | seen (484) times | Article Word Count : 632 |

Should you let a house go into foreclosure when in bankruptcy? Click here to discover what you need to know.

This question is asked very often. A lot of people, especially in Arizona are facing foreclosure. They're the second highest state in the nation right now for foreclosures. In large part that is not necessarily because people have lost their jobs. That is part of it. But more to the point, people have lost so much value in their homes.

For example, someone maybe purchased their home for $300,000. And it’s not uncommon for it to be worth less than that amount. In fact, substantially less, maybe 50% less. $150,000 less is really common.

And so, you would have talked to people maybe five or six years ago and they would never have thought to consider foreclosure. But now that you’re looking at your home and realizing that you’re going to be paying on something for 30 years that, in fact, has negative equity attached to it…$150,000 negative equity in the example I just gave…a lot of people are really giving foreclosure some serious thought and really treating it as a financial tool.

More to the point, a lot of people talk about the foreclosure option.

And so, deciding to keep your home in these economic times with the consideration that property values have dropped dramatically is more common than it’s ever been.

For a lot of people, we just sit down and do the math. Think about the fact that your home has dropped in value, how much has it dropped in value; and figure out, if your property were to see a 5% return, how long would it take you to get back to the value of the property.

If my property was a mortgage of $300,000 but it’s negative $150,000, it’s going to take well over a decade for my property to even become close to its original mortgage value.

For a lot of people, renting right now is a much better idea. Allowing your property to go into a foreclosure or to consider a short sale on your property can be a much better financial decision for you than waiting that decade or so until your property returns back to the regular value.

I look at foreclosure as really just a financial tool.

We talk about the issue of whether the lender can come after you, so to speak. If they can choose to bring a law suit against you.

Arizona for residential properties by and large is what they call a non-judicial foreclosure state. Meaning that, if the lender chooses simply to send you a certified letter, not to bring a law suit against you, but to bring a certified letter and advise you that they’ll be selling your house within six months of your last payment date, you can expect not to be sued. As a result, that lender cannot pursue you for the difference between your house.

We talk about foreclosure all the time here in my Arizona office. And in large part because I think it’s a good financial decision if you’ve sat down and done the math and come to realize that your house is not a little under water but substantially under water.

That’s the advice is give people when they are considering foreclosure.

Be logical about it. Do the math. Figure out, if you’re in such a negative equity position, would renting be a better option? You may be paying less a month than your monthly mortgage. You have no maintenance costs. And in addition in a rental, you don’t have a negative equity position.

That’s really my advice on it.

Re-Publish this Article

<h1>Should You Let a House Go into Foreclosure when in Bankruptcy?</h1> Author: <a href='http://www.articleseen.com/profile_Christy Thompson.aspx'>Christy Thompson</a> This question is asked very often. A lot of people, especially in Arizona are facing foreclosure. They're the second highest state in the nation right now for foreclosures. In large part that is not necessarily because people have lost their jobs. That is part of it. But more to the point, people have lost so much value in their homes.

For example, someone maybe purchased their home for $300,000.  And it’s not uncommon for it to be worth less than that amount.  In fact, substantially less, maybe 50% less.  $150,000 less is really common.

And so, you would have talked to people maybe five or six years ago and they would never have thought to consider foreclosure.  But now that you’re looking at your home and realizing that you’re going to be paying on something for 30 years that, in fact, has negative equity attached to it…$150,000 negative equity in the example I just gave…a lot of people are really giving foreclosure some serious thought and really treating it as a financial tool.

More to the point, a lot of people talk about the foreclosure option.

And so, deciding to keep your home in these economic times with the consideration that property values have dropped dramatically is more common than it’s ever been.

For a lot of people, we just sit down and do the math.  Think about the fact that your home has dropped in value, how much has it dropped in value; and figure out, if your property were to see a 5% return, how long would it take you to get back to the value of the property.

If my property was a mortgage of $300,000 but it’s negative $150,000, it’s going to take well over a decade for my property to even become close to its original mortgage value.

For a lot of people, renting right now is a much better idea.  Allowing your property to go into a foreclosure or to consider a short sale on your property can be a much better financial decision for you than waiting that decade or so until your property returns back to the regular value.

I look at foreclosure as really just a financial tool.

We talk about the issue of whether the lender can come after you, so to speak.  If they can choose to bring a law suit against you.

Arizona for residential properties by and large is what they call a non-judicial foreclosure state.  Meaning that, if the lender chooses simply to send you a certified letter, not to bring a law suit against you, but to bring a certified letter and advise you that they’ll be selling your house within six months of your last payment date, you can expect not to be sued.  As a result, that lender cannot pursue you for the difference between your house.

We talk about foreclosure all the time here in my Arizona office.  And in large part because I think it’s a good financial decision if you’ve sat down and done the math and come to realize that your house is not a little under water but substantially under water.

That’s the advice is give people when they are considering foreclosure.

Be logical about it.  Do the math.  Figure out, if you’re in such a negative equity position, would renting be a better option?  You may be paying less a month than your monthly mortgage.  You have no maintenance costs.  And in addition in a rental, you don’t have a negative equity position.

That’s really my advice on it.About the Author: To get additional information on debt settlement and bankruptcy options please visit our web site. We would also like to offer you a free online debt evaluation. You can claim your free online debt evaluation at <a rel="nofollow" href="http://arizonalegaladvocacy.com"> http://arizonalegaladvocacy.com</a>.

Christy Thompson, your <a rel="nofollow" href="http://arizonalegaladvocacy.com"> Chandler Bankruptcy Lawyer</a>. Article Source: <a href='http://www.articleseen.com/Article_Should-You-Let-a-House-Go-into-Foreclosure-when-in-Bankruptcy_45873.aspx'> http://www.articleseen.com/Article_Should You Let a House Go into Foreclosure when in Bankruptcy?_45873.aspx</a>

Article Source : http://www.articleseen.com/Article_Should You Let a House Go into Foreclosure when in Bankruptcy?_45873.aspx

Author Resource :
To get additional information on debt settlement and bankruptcy options please visit our web site. We would also like to offer you a free online debt evaluation. You can claim your free online debt evaluation at http://arizonalegaladvocacy.com.

Christy Thompson, your Chandler Bankruptcy Lawyer.

Keywords : chandler bankruptcy lawyer, chandler bankruptcy attorney, mesa bankruptcy lawyer, mesa bankruptcy attorney, gilbert bankruptc,

Category : Finance : Mortgage

Print this Article Send to Friend