Bancruptcy or foreclosure first?

[dawnranae]

What is the name of your state?MN
I originally posted this in Real Estate/ foreclosure but they said to tell you they sent me here for better answers and not to nastygram me for double posting ( :

I am a co-owner (secondary borrower on mortgage) of a house that is very potentially going to be foreclosed on ( 3+mo’s behind). I do not reside at the property, have not for 2 years and have been told by other owner he plans to refinance for 2 years now to get my name off mortgage and he has not. I wanted to sell the property 2 years ago and he refused. I have been contacted by Mortgage Co. to see if I can make payments current. I cannot, I currently rent on a lease. I cannot afford an attorney to file a partition and do not know if a partition would do any good at this point. Value of home is aprox. $185,000. We owe $160,000 plus 1-1/2 years property taxes are overdue. My question is what are the best steps for me to take to protect myself. I do not need to file BK due to any other debts, I am maintaining my rent and other bills on time, but am afraid of what may happen if the property forecloses. Would there likely be a deficiency with the numbers provided above? Should I file BK pre-foreclosure or should I wait until a foreclosure takes place? Does it matter? How do BK attorneys charge (upfront or payments)? What happens when property taxes are behind? Is it listed in Foreclosure or handled separately by Govt.? The taxes were not put in escrow. Any advice would be appreciated.

 

[ihatearizona]

If the home sells for less than what is owed on the property and taxes, then you will be liable for any deficiency. You might want to see just how much or how little that amount is going to be. No way you can sell the home??? Your likely to get MUCH more money for it that way.

As for the BK attorneys, they will take payments, but will not file until you've paid them in full.

 

[ihatearizona]

I'd guess the govt should have a lien against the home at this point for unpaid taxes. It will get paid when the home sells.

BK attorneys can charge anywhere from $500 to $1200 for a chpt 7. It varys from state to state, county to county, atty to atty.

 

[dawnranae]

bankrupcy or foreclosure first?

I don't think the other owner will be smart enough to agree to sell the home and it is 3 mth's behind now so don't think there's enough time to sell now. He will hang on to it for dear life... Sheriff will be placing his stuff on the driveway before he realizes what an idiot he is. He has me between a rock and a hard place because I cannot afford an attorney and I cannot sell or do anything with the property w/o his " approval ". I would have sold it 2 years ago.
If this mortgage obligation was off my credit record, my credit score would be much higher. I really don't want to have a foreclosure and BK. If the house goes to auction, do they usually sell for close to market value or do most people face a deficiancy because of it being a foreclosed house? I wanted to know if it was better to file BK before a foreclosure or after. I had heard you should file before they come after you for a deficiency. Can you file after you are given a deficiency bill? Can you include that in a BK after the fact? Is it better to have a foreclosure w/o BK or doesn't it matter?
Thanks again !

 

[ihatearizona]

You're in a tricky situation.

Most foreclosed houses sell for far less than market value. Plus, the lender will tack on lots of fees, jacking up what the deficiency might be.

It's hard to tell you whether or not to file for bankruptcy without knowing the amount you're going to owe after the home sells. What if it ends up being very small and you've ruined your credit for 10 years over $1000!