All Things PS Real Estate

Wednesday, March 28, 2012

Bankruptcy and Property Liens

Many homeowners, under stress from mounting debts and facing possible foreclosure opt for Bankruptcy as a strategy to handle their debts. Popular wisdom is this is the way to wipe the slate clean and start all over.

One of the problems with this scenario is the lien on the property can remain post Bankruptcy.

So for example; you decide to take bankruptcy. The actual debt of the loan is discharged - you are no longer personally liable for the balance of the mortgage debt. However, the bank has retained their position on the property by means of not removing the lien they hold on the property. Now the bank - usually a second mortgage holder - is a player in the probable short sale you are trying to do. This can impede the short sale process and complicate things further.

Many sellers who have completed bankruptcy are surprised to find out that this can be true. But it is. In this flyer from our friends at Orange Coast Title you will find out how to try and avoid this problem.


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If you are late on your payments, facing short sale or foreclosure and need information we are happy to help. Call us at 760-408-5300 or email us at michael@psagent.com. Our help is always free and without obligation. Don't make things work by getting scammed by someone promising that they can make it all better if you just pay them up front fees.

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