Home Short Sale After Chapter 7 Bankruptcy: Why They Often Don’t Go Together

Guest Post by Atlanta Bankruptcy Attorney Peter Bricks.

Guest poster Atlanta Bankruptcy Attorney Peter Bricks has serious concerns about the efficacy of attempting a short sale of a home after a Chapter 7 bankruptcy.

To read more, click here to access Attorney Bricks’ full article on this subject on the new Michigan Bankruptcy Blog of The Hilla Law Firm, PLLC.

If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact attorney John Hilla at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.

6 responses to “Home Short Sale After Chapter 7 Bankruptcy: Why They Often Don’t Go Together

  1. Pingback: Ways to Declare Bankruptcy in Michigan

  2. Short sale after bankruptcy is a mistake. My “closing” will probably take place soon but if I knew 6 months ago what I know now, I would never involved myself with that MESS. I had FHA mortgage that was discharged in chapter 7 over a year ago but hoping to settle the account with the Condominium Association, to spare my neighbors seeing foreclosure notice on the next door unit and to receive enough money from the PNC bank to cover my relocation expenses, I got involved with so called “short sale”.
    I bought the one-bedroom unit for $116,000 in 2003, in 2010 when I stopped making mortgage payments the value of the same unit was around $60,000, now the unit is selling at $44,500.
    In 2010 my outstanding loan balance was about $98,000 and I called PNC requesting the reduction of the home loan principal to match the actual value of my place. I was told that they do not offer that type of the “loan modification option”. They have not received a monthly payment of my home loan since.
    I just give you the “almost final HUD statement” so you can judge for yourself if going through all that hustle for nothing is worth your time.
    Sale price: $44,500
    PNC net proceeds: $36,250
    Realtor Commission: $2,670
    Title Insurance Fee: $1,450
    Legal Fee: $750 (I heard that this is 50% of what they usually charge)
    Unpaid assessments (I stopped payment the association assessment 10 weeks ago) $818
    Seller Incentive $925
    This means that all I am receiving is $925. Since the mortgage loan has been already discharged I am not even interested in any favors from the bank. They cannot collect any money from me even if their sale net proceeds were zero. I am angry, disappointed and actually upset with myself. I was simply stupid. I should have just stay here until the very end, let that “greedy PNC Bank” go through the foreclosure proceedings and maybe sell my unit at the auction for half what they are getting now.
    So stay in your house or condominium as long as you can, save your money and let the sheriff kiss you goodbye. You credit is already very bad and it cannot really get any worse no matter how nice as a human being you are. Do not let others make money on your misery, specially that bank that was never good to you anyway. After all, the bank is not losing anything, do not fall into any “short sale” promises, and represent only your own interest.
    Good Luck and be smarter than I were! Janina

  3. I agree, Janina, and I’m sorry to hear that you’ve had such a difficult time. Homeowners should be very careful to quantify in dollar terms exactly what sparing their neighbors the sight a foreclosure sign is actually worth to them, given that a discharge of mortgage liability in bankruptcy has already enabled them to walk away from the property without fear of collections. The very best of luck to you, going forward!

  4. Pingback: Do I Need to Keep Paying Homeowners’ Insurance after I Surrender my Home in Bankruptcy? | Michigan Bankruptcy Lawyer

  5. Pingback: What Are the Tax Consequences of a Short Sale? | Michigan Bankruptcy Lawyer

  6. Pingback: The Mortgage Meltdown: What Really Happened? | Michigan Bankruptcy Lawyer

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