Bankruptcy and foreclosure represent two common types of cases associated with individuals or businesses experiencing financial problems, according to the American Bar Association. Although commonly referenced together, bankruptcy and foreclosure actually are two very different types of legal proceedings, with different objectives and results.
The function of a bankruptcy is to permit an individual or business the ability to obtain a discharge of or payment plan for their debts, according to the U.S. Bankruptcy Code.
The function of foreclosure is to allow a mortgage lender the ability to claim ownership of real estate to assist in satisfying the balance owed on a past due loan
The filing of a bankruptcy directly affects foreclosure, underscoring the primary difference between these two types of proceedings. The moment you file for bankruptcy, the bankruptcy court issues what is called an automatic stay order. The order requires the suspension of the foreclosure proceedings or process absent a further directive from the bankruptcy court
Contrasting the ultimate potential of a foreclosure and a bankruptcy highlights the differences between these legal proceedings. The ultimate potential of a foreclosure typically is the loss of your real estate, including your home.
A likely ultimate potential of a bankruptcy is a decision permitting you to keep certain real estate, including your home, provided you follow the terms of a reaffirmation agreement. A foreclosure occurs when no other alternative exists beyond the mortgage lender attempting to take possession and ownership of real estate.
Bankruptcy creates a potential alternative to the foreclosure process through a reaffirmation agreement. The reaffirmation agreement is designed to permit the debtor to maintain ownership of the real estate and requires her to make recurring payments on the loan to the mortgage lender.
Both bankruptcy and foreclosure cases represent complicated legal actions. Facing one or both of these types of proceedings suggests that your financial, personal and legal interests are best served by retaining experienced legal counsel.
Many people with heavy debt burdens may be wondering, “Is bankruptcy right for me?” Bankruptcy could be the best option if your low credit score and debt impacts your life in an extremely negative way. For many people, this means that getting a job and keeping a home, car, or insurance is almost impossible. If you would like to keep up with payments but have fallen behind due to unforeseen financial hardships, bankruptcy might be the best choice for you.
Before filing for bankruptcy, make sure you have explored all other options. It’s important to go to counseling before choosing any form of debt relief, and it’s required for those interested in bankruptcy.
Options usually discussed by a credit counselor are debt consolidation, settlement, and customized debt management plans.
So definitely, Bankruptcy and Foreclosure is not something good for anyone, and most banks and local lending institutions wouldn’t give you a loan when you are facing bankruptcy and foreclosure but that is not the case with Car Title Loans California, we are different from other Title Loan companies and we can really accommodate no matter what.
Even when no one seems to be listening to you just come to us and we will be glad to help you out. So stop waiting, just visit us today and get your financial problems get fixed!