The number one question I get asked when talking about the foreclosure defense strategy that we use is:
What about bankruptcy?
Bankruptcy is a very useful tool, one which our founding fathers were brilliant to give us. It is great for eliminating unsecured debt and many other things. But if your main or sole need is to keep your house, it doesn't work as well.
First, when you go into bankruptcy, you're going to have to start by admitting that you owe that $200,000 or whatever in mortgage debt. You only owe that if someone has the right to collect that. Why admit it?
Second, you then have to turn around and lay your assets on the table. If the trustee feels like there's something they can do, they are going to strip the house, do what I do, and try to get the house for the unsecured creditors. Great for them, bubkis for you.
Lastly, if the cases in front of Judge Federman are any indicator, the creditors are doing a much better job of putting together a paper trail in bankruptcies, as opposed to just a regular foreclosure. This means, to the extent that there is paperwork to be found, they are getting ready for it. This means that they will attempt to show that they are a secured creditor who should be allowed to release the automatic stay and sell the house.
Or, of course, you could reaffirm the debt. Which I'm sure they'd be happy for you to do.
For those who crave finality this may be a good offer. But those looking to push forward and show how little the banks actually have in the way of paperwork, we recommend that you call us and work with us on our strategy.
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