What is the worse case senario for foreclosure on a rental house I own? - Bankruptcy Law Questions and Answers- LawQA.com

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What is the worse case senario for foreclosure on a rental house I own?

I own a rental house that is most likely going to be foreclosed on by one of the two banks that I have mortgages with. Can they put on liens on or seize other property I own that has nothing to do with that house or that bank without my consent? Will they just pursue me personally for the difference from sale price by getting a judgement? Do most banks accept payment plans after a judgement is granted?

Answer By Eric Benzer
Eric J. Benzer, Attorney at Law
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You'll lose it and get sued for balance.

Answer Applies to: Maryland
Replied: 10/13/2011

Answer By Stephen Trezza
AZ Law Group of Trezza & Associates
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The worse case is they file a lawsuit to obtain a judgment and attach assets.

Answer Applies to: Arizona
Replied: 10/7/2011

Answer By David VanDyke
Bird & VanDyke, Inc.
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Generally, lenders on rental homes in CALIFORNIA will foreclose on the home by way of non-judicial foreclosure. This means that on the First Deed of Trust they will take the property back and you will owe no deficiency regardless of what the home is worth now. However, they will usually sue you for sums owed on second/junior loans against the property if there is a deficiency. Another huge worry for you is the potential income tax liability you may have in the event of foreclosure on rental properties as a result of cancellation of debt income.

Answer Applies to: California
Replied: 10/6/2011

Theodore N. Stapleton, PC
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They have to file a confirmation action after the foreclosure sale in order to pursue an unsecured deficiency against you.

Answer Applies to: Georgia
Replied: 10/6/2011

Answer By Eliza Ghanooni
Eliza Ghanooni, Attorney at Law
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The answer to your questions depend on a variety of factors. Where is the rental property located? Did you fill out the loan application as a primary residence or as a rental property? Did you ever refinance the property? How many loans are on the property? An attorney needs answers to the questions above before answering your questions. Also, if you do get a deficiency and you qualify for a bankruptcy, the bankruptcy can prevent the creditors from pursuing you.

Answer Applies to: California
Replied: 10/6/2011

Bankruptcy Law office of Bill Rubendall
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After a foreclosure a lender may have the right to sue you for the deficiency. If they obtain a judgment they can collect using the various methods spelled out in California law, included wage garnishment or levy on bank accounts. Another method of collecting is filing a lien on your property. You may want to consult a bankruptcy attorney.

Answer Applies to: California
Replied: 10/6/2011

Answer By Bill Zurinskas
Bankruptcy Law Center
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Foreclosure and bankruptcy in Colorado go hand in hand these days. After the foreclosure, the 2nd deed of trust holder usually becomes an unsecured creditor and has the right to sue you for the amount of the 2nd mortgage. The 1st deed of trust holder will have the right to sue you for any deficiency after foreclosure, if that is the case (Imost foreclosures do not have a deficiency). You need to call the public trustee to find out if there is a deficiency. If you get 1099'd that means the creditor has written off the debt, and even though the debt doesn't exist anymore you may (but not always) have to pay taxes on the amount written off.

Answer Applies to: Colorado
Replied: 10/6/2011

Answer By Dan Wilson
Dan Wilson Bankruptcy
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As far as I know, creditors cannot place a lien on other property without first getting a judgment. Creditors are becoming more aggressive about going after deficiencies. You may have to file bankruptcy to discharge your debt. Creditors will usually settle for a discount if you have cash particularly 2nd mortgages.

Answer Applies to: Colorado
Replied: 10/6/2011

Answer By Darren Aronow
The Law Office of Darren Aronow, PC
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The lender for the property is entitled to go after you for a deficiency judgment. Once they get the judgment, then it will attach to any other property that is in your name. You are better off trying to short sale the house and negotiate with the lender for no deficiency rather then let it go to foreclosure.

Answer Applies to: New York
Replied: 10/6/2011

Law Office of Lynnmarie A. Johnson
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They can get a deficiency judgment for what you owe them and go after any assets the Court allows them to. Whether or not they will accept payments after the judgment is granted is up to the individual creditor and depends on what kind of assets you have. If you think this is the way you want to go, why not do a deed in lieu of foreclosure and offer to settle for a certain amount on the deficiency or the estimated deficiency and set up payments now?

Answer Applies to: Michigan
Replied: 10/6/2011

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