How does a bankruptcy differ from a foreclosure?

The main difference between the two is what happens after the sale of the property. In a foreclosure, there is a possibility that you will still owe money to the creditor after the sale if the proceeds of the sale don’t cover the debt. In a bankruptcy, however, all debts will be discharged after the case is closed.

What comes first bankruptcy or foreclosure?

You’ll most likely gain more if you file for bankruptcy before your home is foreclosed. For one thing, you’ll prevent the lender from getting a deficiency judgment if one is allowed in your situation. You’ll also get to stay in your house longer than if you let the foreclosure happen and later file bankruptcy.

What’s the difference between a foreclosure and a bankruptcy?

The choice depends upon several factors, including income, living expenses, other debts that need servicing (such as student loans and credit card debt), and outlook for future income growth. A foreclosure affects only the home while a bankruptcy affects all debts.

Which is worse foreclosure or bankruptcy in Canada?

In Canada at least, bankruptcy is significantly worse for your credit rating. The reason is that a foreclosure only affects your mortgage, whereas bankruptcy affects all your unsecured loans and should only be used as a last resort.

What happens to your house if you foreclose on it?

If the lender does decide to foreclose, they will generally simultaneously start foreclosure proceedings as well as a lawsuit against you to recover any money which the home sale does not produce. You will be informed of the foreclosure proceedings by receiving in the mail a document known as a Petition for Foreclosure.

How does a foreclosure affect your credit score?

This meant that your credit score would not be affected at all by a foreclosure, as long as the bank could recoup their money by selling the house. Foreclosure may not affect your credit If your lender has not reported the mortgage to the credit bureaus, then your foreclosure may not affect your credit score.

What is the difference between a foreclosure and a bankruptcy?

The one major difference between bankruptcy and foreclosure is the initiator of the legal action. Bankruptcy filings are legal actions that are initiated by a debtor, but a foreclosure is a legal action that is initiated by a lender.

What is worse a foreclosure or a bankruptcy?

The effects of a foreclosure are far worse than that of a bankruptcy when applying for a mortgage loan for a new home purchase. The lenders thinking is that the proposed borrower, already having had one foreclosure, carries a likelihood that they may let the same situation occur.

Which is better foreclosure or bankruptcy?

A second reason why bankruptcy or a short sale is better than allowing a foreclosure to proceed to a foreclosure judgment and sale, is that you will be able to qualify for a mortgage loan by doing a short sale or deed-in-lieu of foreclosure, or even a bankruptcy, faster than if you have a foreclosure on your record.

How do I beat foreclosure through bankruptcy?

if you lack an attorney.
Complete the petition for bankruptcy. The form comes complete with instructions.
File the petition.
Advise your mortgage lender of the bankruptcy filing.
Inform the mortgage lender you want to enter into a reaffirmation agreement.