Lawyer Bees, questions about filing for bankruptcy.

posted 3 years ago in Legal
  • poll: Does my friend have an accurate impression of what bankruptcy can do for her?
    Yes. : (0 votes)
    No. : (4 votes)
    14 %
    Hell no. : (25 votes)
    86 %
  • Post # 3
    2878 posts
    Sugar bee

    I’m not an expert in any case, but I think she will lose the house. After bankrupcy your credit is extremely bad and no, I don’t think the bank will want to loan anything to her. They won’t negociate lower insterest rates with a bad payer. I’ve heard it takes 7 to 10 years building a good credit after you’ve filed for bankrupcy. Meanwhile, it’s extremely difficult to get credit for anything, and she especially won’t be offered a 200K loan for a house. No way. It’s a terrible idea.

    I don’t know what to suggest, I don’t know what happens when you’re late on mortgage, but I would expect losing the house either way, if she doesn’t get her finances back on track. She needs to go to the bank and asks for counseling before it’s too late. 

    Post # 4
    10454 posts
    Sugar Beekeeper
    • Wedding: January 2011

    @IheartUFC:  Where is she?  That makes a difference.

    Post # 5
    5787 posts
    Bee Keeper
    • Wedding: October 2014

    If she’s in a US state with a high foreclosure rate like Nevada or Florida, she “may” find the bank willing to rewrite her loan, but that’s really a long shot, even in those areas, or heck even in a city like Stockton, CA (one of the highest foreclosure rates in the country) she’ll have a hard time. Banks are far more likely to just sell the house at auction. Can she not just get her payments current then refinance ? Interest rates are great right now and if you’re current on your payments then it’s not too hard to refi unless your credit is really really bad. Even if you’re underwater, you may still be able to refi as long as you have ok (not even great) credit.

    sounds like your friend is in for a very rude awakening.

    Post # 6
    42157 posts
    Honey Beekeeper
    • Wedding: November 1999

    Depending on where she lives, there may also be free credit counselling available. Bankruptcy is an extreme choice for such a relatively small debt.

    Post # 7
    3344 posts
    Sugar bee
    • Wedding: April 2013 - Rhode Island

    Bankruptcy ruins your credit for like 10 years.  She absoutely has no idea what she’s talking about.  There are lawyers who specialize in bankruptcy.  She should talk to someone like that before doing this.  It is a last resort action.

    Post # 9
    4395 posts
    Honey bee

    House prices are trending up. The bank will probably take her house and sell it, and she won’t be able to another one for 7 years or so, since this bankruptcy/foreclosure will be on her record for that long. Depending on what state she is in, she may or may not be able to find a rental easily because of the banktuptcy on her record. 

    Post # 10
    1463 posts
    Bumble bee
    • Wedding: August 2012

    She needs to see a lawyer before she does anything.  Not only does it destroy your credit and negatively affect you for at least 7 years, if she has funds readily available to fix her current financial affairs, her bankruptcy could be denied by a judge. 

    Post # 11
    9859 posts
    Buzzing Beekeeper
    • Wedding: May 2014

    @IheartUFC:  pretty sure she’ll lose her house.

    Post # 14
    2687 posts
    Sugar bee
    • Wedding: September 2015 - Ketchum, ID

    @IheartUFC:  it sounds like she needs to go to a financial counselor. 

    Post # 15
    1834 posts
    Buzzing bee
    • Wedding: August 2013 - backyard in the woods

    Pretty sure they can’t take your house in a bankrupcy if it’s your only residence. However, she will still be responsible for the payments, so it’s not what she’s thinking it is.

    Post # 16
    2878 posts
    Sugar bee

    @IheartUFC:  Thanks for the update ! I think you shouldn’t expect this money back unfortunately, but I hope she will. But I agree with @mrspinesol:  there is something wrong with her way of dealing with finances and she should definitely seek advice and a good financial plan/budget with a counselor. It’s a good thing she decided to have a roommate to split the costs. If she wants to get a better situation, it’ll take time and discipline, but she can succeed if she’s willing to change and put efforts into bringing her finances back on track. 

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