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Disclaimer: I am not a lawyer. I am
only publishing my interpretation of my situation. You should seek your
own legal representation for your own particular
situation. Do not rely on my
opinions or statements for your own purposes as state
and local law varies as do individual circumstances.
Use LegalMatch to Find a Local Trustworthy Lawyer in Your Area.
Most people will probably have thoughts about bankruptcy
and foreclosure before they ever miss a mortgage payment
or a car or truck payment. They will see what is coming
before it actually starts showing up on their credit
reports. It is incredibly important to recognize this
critical period and assess your situation. For some
people, this period may cover several months. For
others, it may only be one month if even that much - but
there is still a period before it hits your credit
report; and you can make some very important decisions
during this period.
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The biggest decisions are about residency and
transportation - where you and your family are going to
live and what you are going to drive. Let's consider the
housing first.
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For housing, people are either going to keep what they
have or buy something less expense or move into a rental
unit (house or apartment) or move in with family or
friends or just move out (hopefully, you do not find
yourself in a situation as dire as this option).
Whatever the choice, you have to decide which one you
can afford or which one you will have to take. For
buying a less expensive home or for moving into a rental
unit, a credit check will probably be needed. If you are
considering either of these two options, you need to
move fast before you start missing payments. It may even
be worth make a few extra mortgage payments and vehicle
payments according to schedule until you secure your new
place of residence.
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If you are buying a less expensive property, there will
probably be a credit check when you start the mortgage
application and again before the closing. For buying a
property, depending on a lot of variables (your
location, the banks, your real estate agent, the
seller's real estate agent, the appraiser, the title
company, the insurance company, etc) a closing could be
done in less than a month - but that would be very
unlikely. Plan for a two month closing period at least
because you have to first even find a property that you
like and can afford and then have the seller agree to
your offer. Most mortgage brokers will recognize right
away what you are doing - planning on foreclosure unless
you have legitimate reasons for your move such as a new
job that requires relocation, but there is a very likely
chance that whatever mortgage broker that you use will
work with you on this situation regardless. If they do
not, find another broker and go from there. Typically, a
person can keep their primary residency in a bankruptcy
filing provided that they can make the scheduled
payments. Bankruptcy laws are, however, state specific
so check the laws in your state first.
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If you plan on moving into a rental unit, the credit
check and application are usually less stringent. You
still, however, have to find a unit that you like and is
available. As soon as you do find one, put in your
application. Usually, there is one credit check for this
and it is usually less stringent than a credit check for
a mortgage. Still, get your application in and approved
and credit checked by the rental manager.
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Now consider what you are going to do for
transportation. Plan this for the next seven years or
so. It might be that your current vehicle is new enough
and cheap enough that you just want to keep it. If you
do not think that your vehicle will last more than five
years or if your current vehicle costs too much money to
keep, you need to consider another option for your
transportation. This depends a lot on each individual's
situation and location. It might be that you can get by
with public transportation. The majority, however, will
need their own vehicle. For vehicles, carefully consider
your options for buying or leasing. Due to bankruptcy
laws (which vary by state), consider what a bankruptcy
court will do when it considers equity in a new car or
truck (your down payment). It might be best if you put
little to no money down on a purchase. Depending on your
state's bankruptcy laws, leasing a vehicle might be a
much safer route to take.
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There are many other decisions that need to be made if
you are considering foreclosure or bankruptcy, but where
you are going to live and what you are going to drive
are two of the most pressing. Consider your options
carefully and consult with professionals in your area
before you make your final decisions. Remember, you will
have to live with these decisions for the next few
years.
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