Answer:  - No they can’t take anything away from you because the property itself was pledged as collateral for the loan. All they get is the property back. What you have to watch out for is if they file a deficiency against you it the property was sold for less than the amount owed. If the file a deficiency judgment again you and you don’t have the ability to pay, the bank can then begin to garnish wages. At this point most people file bankruptcy. It is at this time where your annuities and IRA may be affected. If at all possible, try to negotiate a “deal” with the bank to get them to agree to a satisfaction which means they can’t file a judgment against you. They will just issue you a 1099.

Answer: -Tom, I have to make the assumption that you’re planning on or you’ve already stopped making payments on your home or you wouldn’t be asking these questions.  A short sale in my opinion is by far the best option if you can’t sell your home for what’s owed, rent it out or can’t work out something with the bank like a forbearance or loan modification.  A short sale will affect your credit but will eliminate a foreclosure on it.  If done properly will also eliminate the possibility of a  deficiency judgment.  If a short sale is not accepted an ultimately your home ends up at the foreclosure auction, then you will either receive a 1099 or they will file a deficiency judgment against you.  If they file a deficiency judgment and you can’t pay, they can garnish wages.  Depending on the amount of the judgment, this forces most people to file bankruptcy to eliminate the judgment.

Answer: -Well for most people who go through a hardship like foreclosure, the main reason they file bankruptcy is because a judgment was filed against them.  And since they are not in a position to pay off their mortgage amounts, bankruptcy was their only option unless they wanted their wages garnished.  Bankruptcy can protect you from a deficiency judgment if you file before the judgment as well because that mortgage amount would be included in the bankruptcy.  Most people wait to file bankruptcy until after foreclosure because lenders have don’t necessarily have to file a judgment against the homeowner.  They can issue a 1099 which means the mortgage amount they forgave is considered as taxable income.  I would recommend you seek counsel from a professional bankruptcy attoney so you know all your options.  Good Luck

Answer: -Unfortunately we are not bankruptcy attorneys so maybe someone else can shed some light on this topic.  I do know that a Chapter 7 is a wipe out and therefore you would liquidate all your assets to pay off all your creditors.  An attorney is hired to help “protect” those assets, like personal belongings. The trustee or attorney who represents the court and the creditors will look at all the assets (house, car, furniture, equipment) anything of value and decide what must be liquidated to pay some of the debt that was wiped out.  So depending on whether or not your home has any value, it would be in your best interest to find a good attorney or maybe even investigate different Chapters of bankruptcy’s to make sure Chapter 7 is the way to go.

Answer: -No.  Bankruptcy only postpones an auction or short sale which buys you more time.  In fact, many short sale investors will use bankruptcy as an option if they need to buy more time so it doesn’t go to auction, as long as it’s in the best interest of the homeowner.

Please help. My father’s home recently foreclosed (last week) and our incompetent bankruptcy lawyer did not know it was important to file the bankruptcy prior to the foreclosure which would have cleared any tax consequences or deficiency judgment against him. Since my father has filed bankruptcy AFTER the foreclosure, I understand the lender will either forgive the debt and issue a 1099 to the IRS or seek a deficiency judgment. My question is, if the lender decides to seek a deficiency judgment, will the deficiency amount be discharged in the bankruptcy – although he filed the bankruptcy after the foreclosure? Please advise. Thanks!

Answer: -More than likely you won’t even have to worry about the deficiency judgment because most lenders don’t file a deficiency judgment against homeowners.  It is much more common for them to issue a 1099.  But yes, if by chance they did file a judgment against him, filing bankruptcy after foreclosure shouldn’t matter.  In fact, most homeowners will file bankruptcy after they are hit with the deficiency judgment so it will be wiped out.

Answer: – The foreclosure auction will wipe out any junior liens that are attached to the property if they don’t protect their position.  If a judgment or lien was filed against the homeowner, then it will stay with him unless he files bankruptcy, in which in most cases, liens and judgments are wiped out.  So no, the association wouldn’t be able to collect.  The only liens that don’t get wiped out are the property taxes and IRS tax liens.  Those get paid first when the property is taken back by the bank.

Answer: –  No, not while in bankruptcy.  Bankruptcy only postpones the auction though for 6 to 8 weeks unless you file chapter 13 which is a workout option.  If you fail to meet what’s agreed upon, then the foreclosure begins where it left off.  We wrote a small article about <a href=”http://www.foreclosureuniversity.com/studycenter/freereports/options_of_homeowner.php” target=”_blank”>Bankruptcy</a> you can read more about.

Answer: -The bankruptcy will postpone the auction for approximately 2 months, then it will be released and the foreclosure process will pick up where it left off.  If no one bids at the auction, the junior lien holders have the option of filing a deficiency judgment where they can come after you for the amount lost, or they can 1099 you for the amount they lost or they will do nothing.

Answer: -  Absolutely you can sell your home.  You should have a statement from the lender showing you the full payoff amount.  This will include all late fee, attorney fees, foreclosure fees, etc.  As long as you payoff everything, you can sell.  The only time you can’t sell is if you’re in bankruptcy.