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Monday, April 21, 2008

To File or Not to File?

I have been working with a lot of clients who have filed or are considering filing a bankruptcy. If you are in a situation where you have declared a bankruptcy and included mortgages in the bankruptcy there are a few things you should be aware of.

First a bankruptcy does not transfer ownership of a property. Once the bankruptcy is discharged the lender will move forward with the foreclosure. Most foreclosures take twelve months to complete in Minnesota. The foreclosure is the process that will allow the lender to take ownership of the property.

During the foreclosure process, the owner (borrower) is still responsible for that property. The owner is responsible for maintaining, securing and insuring the property. If the property is damaged, the lender may submit the claim to your insurance. This could impact the rates you are paying for other insurance policies.

If you have had the mortgage discharged in a bankruptcy it is possible to sell the property (using a short sale if necessary), avoid the foreclosure and transfer ownership of the property to the buyer.

Posted by Mary Alice Short

MaryAlice@MnRealEstateTeam.com

Posted By: Ryan O'Neill @ 6:28:16 PM