Many good people facing a home foreclosure wonder if they will ever be able to purchase a home again, or if they will be able to find a place to rent after foreclosure. The good news is that foreclosures do not carry the stigma they once did. You can get a loan again. Most everyone knows a friend or family member who has been affected by the housing crisis. If you are facing foreclosure, the sooner you accept and confront the problem the better of you will be.
You may be able to avoid foreclosure through a loan modification or a short sale. In a loan modification, the bank modifies the terms of your loan to make the payments more affordable. In the case of a short sale, the bank agrees to sell the house for less than what you owe. In some cases, the bank agrees to forgive the difference or the loss. In other cases, the bank files a lawsuit to collect the difference and seeks a “deficiency judgment”. Chapter 13 bankruptcy can allow you to catch up a past due mortgage even when the bank refuses to work with you.
Chapter 7 bankruptcy often follows a foreclosure. Chapter 7 bankruptcy allows you to discharge the debt obligation to the bank and move on with your life. Typically, if you manage your credit well you can become eligible for a home loan two years after a bankruptcy or three years after a foreclosure.
Most people can find a place to rent following a foreclosure without too much difficulty. If a potential lawsuit from your bank is still looming, landlords may treat you with caution. Both lenders and landlords dislike uncertainty. The certainty that comes from knowing your debts were discharged in bankruptcy is often better in the eyes of a lender than old unpaid debts and obligations.
Learn more about buying a home after foreclosure here: http://homeguides.sfgate.com/mortgage-after-bankruptcy-foreclosure-2516.html
Did you know that our bankruptcy laws in the United States are based in part on biblical law? Chapter 7 bankruptcy laws were established under the influence of biblical law. Under the law of Moses, as set forth in the book of Deuteronomy (Deuteronomy 15:1-2), there was a forgiveness of debt every seven years. Still, many conscientious people of faith worry that filing bankruptcy may be seen as a sin before God. They rightfully want to be honest in their dealings with others.
The biblical law requiring the forgiveness of debts was certainly designed to help the poor, but in my opinion, it was also designed to help the rich maintain their spiritual well-being. The law reinforced the understanding that all earthly goods really belong to God and that we are just stewards of those goods.
The Bible is replete with parables concerning the forgiveness of debts as well as sins. The Lord’s prayer states “forgive us our debts, as we forgive our debtors”. The parable of the unforgiving servant teaches a similar message (Matthew 18:23-32). Exodus 22:25 forbids charging interest to the poor. The consistent teaching of both the Old and New Testaments is that compassion, mercy and justice are to override purely economic concerns.
Under normal circumstances, we are under a moral duty to pay our debts and obligations. There are also circumstances where debts become so overwhelming that the debtor requires relief through the gift of mercy. In our day, this act of God’s mercy is accomplished through the bankruptcy laws of our land. Illness, injury, misfortune, and poor decisions can all contribute to financial crisis.
Bankruptcy allows for a fresh start free of the burdens of the past. It is an extension on God’s mercy. Bankruptcy allows the debtor to break the chains of financial bondage which can cause enormous stress, difficulty, and personal despair. We are blessed to live in a country that allows for the elimination of debts through bankruptcy. It is a protection against unforgiving creditors who would “grind the faces of the poor”. Bankruptcy relief allows those burdened by debts they cannot repay a “newness of life” in keeping with the teachings of Christ.
John Clayton Schleiffarth