Bankruptcy is one of the legal options for avoiding foreclosure.  While it is a legal option, the question you must ask yourself is whether or not it’s worth filing for bankruptcy?  Or, would it be better to foreclose on your house?  Allow us to examine the two options.  The important thing is that you are able to make the best informed decision possible.  Only you know what will be better for you and your circumstances.

The bottom line when trying to decide between bankruptcy and foreclosure is that neither option is the “easy way out”.  No matter which route you choose, there will be difficult consequences that you will have to bear.  For example, a foreclosure usually remains on your credit record for seven years while bankruptcy stays for 10.  This is not to say that foreclosure is definitely the best option.  Experts say that mortgage lenders will usually look first on a credit record for a foreclosure before they would look for a bankruptcy that didn’t include the house.  This is something to consider if you think you will want to apply for a mortgage in the next 7-10 years.

You might be tempted to accept the fact that foreclosure is your only option at this point.  However, expert advice at this point in time, considering the global financial crisis, it would be better to avoid it.  The first thing you should do, whether you are only one or two months behind on your payments or you are several months behind, is to contact your mortgage holder before they take the process further.  This is still recommended even if you have already received a “notice of default”.  You still have time to make a plan to get back on track with your mortgage payments!

Reblog this post [with Zemanta]