What should they do?

My Brother and Sister in law had there home foreclosed and are now being sued by the lone company for back payment owed my brother lost his job and they are just making by month to month. What is going to happen in court? And what do they need to do to be prepared? And would this all go away if they filed for bankruptcy?

This entry was posted on Tuesday, July 29th, 2008 at 11:12 pm and is filed under Bankruptcy Law. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

3 Responses to “What should they do?”

1. Dr. Deth Says:
   July 30th, 2008 at 8:14 am

   if they lost the house and are physically out it and the mortagge company is suing them, it may be best to file for bankruptcy. That will cost possibly close to $1000 for lawyer and filing fees that you would have to pay up front , but should make the loan company go away

2. WJ Says:
   July 31st, 2008 at 1:44 pm

   If they go to court and a judgement is issued against them they may not be able to claim it in a bankruptcy. Some court judgements are not dismissed by bankruptcy but a lawyer could tell you for sure if it would be able to be claimed. Perhaps they could contact the loan company and explain their financial situation and make a payment arrangement that is low until your brother returns to work and they get on their feet.

3. lantmana Says:
   August 1st, 2008 at 2:44 pm

   First off with the new bankruptcy laws it will be harder to file. See if this makes sense with this example, Say they owe 200,000 left on the house at the time of forclosure. Through the forclosure process the bank/lender sells the house for 150,000. Now there is 50,000 left of back payment/shortage that your brother and sister inlaw are liable for. Basic court proceedings will just set up a garnishment of their wages untill the settled balance is paid off. (settled balance being what is finally agreed on through the courts). The lender will try to get as much money back as possible, your brother and sister in law’s credit and personal finance’s will be gone through with a fine tooth comb. If they are putting any money away in a 401k or IRA, more than likely the courts will rule that they will have to stop that and use that money to payback the lender. ( I dont believe they can go after money that is already in a 401k or IRA but they might want to check with a lawyer for that).

   Would be best for them to get a lawyer that deals with forclosures just to make sure they dont get screwed over by the lender, but they will have to pay the lender back regardless.

   Good luck