Cash for keys! It’s still available after a foreclosure. My advice is get that cash!

(For the current state of the foreclosure crisis see this blog: http://bit.ly/JGU1dZ ).

How many times does someone hand you cash?  I’m sure it’s not often but it is the case that lenders are offering cash for keys after a foreclosure.  You may or may not be upset about the foreclosure and you may actually be relieved that the process is all over.  You may have tried a short sale that failed (or you may have never attempted one) and now the foreclosure sale has taken place and you are being contacted by the new owner of your property to find out from you what your plans are.

Remember that this new owner will have to evict you legally before he can get you out of this house that you formerly owned even though he is the new legal owner of the property.  He cannot throw you into the street.  There is no “self-help” allowed and the only way a new owner can get you out of your former home is through the eviction process.  You are no squatter.  You originally entered the property legally.   You are the former owner with the legal right to be there until a judge evicts you in court.

In California eviction means that the landlord has to give you a 3 day notice, followed by a filing of an unlawful detainer action, followed by a trial, followed by a sheriff who will actually remove you.  This all takes time and money.  To get you out will take around 4 to 6 weeks depending on how behind the courts and the sheriffs are.  In addition he has to hire attorneys, pay filing fees, and wait until the process finishes.

Or he can pay you money.  The going rate is about $3000 so don’t sell cheap.  Many of my clients have been offered and have received this money.  It will cost the landlord almost that much to proceed with and eviction plus there is the time involved.  The landlord may ask you to leave quickly (like in a week) but you can always try to negotiate for more time.  Just don’t scare him off so he doesn’t pay you.  Remember though that he will know the costs of legally removing you and that is your leverage.

You have a legal right to be in this home until he goes through the lengthy and costly legal process of removing you.  You can remind him of that if it helps the negotiations but always remember that you have legal rights.  If you don’t exercise them you will lose them.  You will be saving him time and money if you get out quickly with no hassles for $3000.

An extra $3000 can help a lot with bills and getting a new place.  If you can get more time then do so but if not then I suggest you take the money.

If you need a bankruptcy now to get rid of credit card or automobile deficiency or medical debt then call me and we will discuss how to free you up from the rest of your debt.

I am a San Diego bankruptcy attorney.  Please visit my website for more information at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation at (619) 702-5015.  Call now for free credit report and analysis!  If you or someone you know may need to file a bankruptcy get my FREE E-BOOK: “13 THINGS YOU SHOULD DO TO PREPARE FOR OUR BANKRUPTCY FILING” by e-mailing me at: farquharesq@yahoo.com.

How to stay in your home for the maximum time after a foreclosure. Use bankruptcy, HAFA, and cash for keys!

(For the current state of the foreclosure crisis see this blog: http://bit.ly/JGU1dZ ).

There are a number of thing you can do to remain in your home for the maximum amount of time after a foreclosure has been filed against you but the first thing you do when you get behind on your home mortgage payments is just wait.  As I reported in a previous blog, the banks are now slowing down in their processing of foreclosures.

This is good for you though if you are in a situation where the bank should be foreclosing on you because you are more than three months behind on your mortgage payments.  At this point you should continue to reside in your home and wait for the bank to make a move that you can respond to.  No one can oust you from the home you own unless they file a foreclosure against you so wait on it until it comes.  When it does it will come with a NOD.

In California you will get a Notice of Default (NOD) as the first step in a foreclosure.  This just means that the bank has begun the legal process and it will take 110 days before there will be an actual sale of your home.  This is when you file for a chapter 7 bankruptcy. (Chapter 13 issues are more complicated).  File the bankruptcy the day before the sale date and a “stay” will automatically be created.   The stay will prevent the bank from taking further action and you will get the maximum time to remain in your home.  A bankruptcy will give you the added advantage that your credit card, medical, and personal loan debt will be wiped away leaving you debt free.

The bank will respond to your bankruptcy filing with a “Motion for Relief from Stay” to get the bankruptcy stay lifted so the bank can proceed with the sale of your home.  They could file this motion right away but in some of my cases it takes them another five weeks just to file this document.  It then takes around another thirty days (sometimes it’s quicker) to get it granted.  Now the bank will get another sale date and sell your home on the new date.

Once the home is sold you still cannot be thrown out in the street so don’t worry.  The new owner has to file an Unlawful Detainer/eviction action to remove you.  You begin now to negotiate with the bank or the new owner for cash for keys.  It is in the new owner’s best interest to give you the cash.  Remember that they don’t want to file an eviction because of the expense and time involved.  Many of my clients get around two to three thousand dollars in cash for keys and many get two or three more months to remain in the home.

But don’t forget the short-sale!  A foreclosure sale on your credit will prevent you from getting a FHA loan for the next five to seven years!  Bankruptcy will only stop you from FHA loan eligibility for two years so it’s not nearly as bad on your credit as a foreclosure sale is.  A short sale avoids the foreclosure sale if you can get the bank to agree to it.  Banks do want to allow these short sales so with a good realtor it’s usually not a problem.  The short sale will free the bank from the hassle and expense of a full foreclosure sale which would leave them with another piece of real estate that they don’t want.

Get a realtor who does short sales and he or she will explain the process.  Basically you will be offering the bank the current market price for the home and not what you owe on it.  The bank will settle for this and the realtor will negotiate his or her fee with the bank.  It will cost you nothing.  It is unlikely that the new buyer will give you cash for keys though to move out but there is a HAFA short sale government program that can pay you $3000.  HAFA stands for Home Affordable Foreclosure Alternative and it allows for you to get the $3000 for relocation costs.  Check with your realtor about the possibility of getting this money in the HAFA government program.

So there are a number of strategies to remain in your home for as long as you can and maximize your cash when you leave and save your credit as much as you can.  Remember that no one can throw you out or remove you in any way.  A foreclosure must be filed and an eviction must be further filed even if your home is sold at a foreclosure sale.  Only then can a Sheriff remove you but no one from the bank or any mortgage loan company can remove you with out these court actions.  So take heart, take your time,and maximize you advantages!

I am a bankruptcy attorney practicing bankruptcy law in San Diego.  Please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation at (619) 702-5015.  Call now for free credit report and analysis!  If you or someone you know may need to file a bankruptcy then please get my FREE E-BOOK: “13 THINGS YOU SHOULD DO TO PREPARE FOR YOUR BANKRUPTCY FILING” by e-mailing me at farquharesq@yahoo.com.

Cash for keys after Bankruptcy and Foreclosure

If you have been in foreclosure before the bankruptcy then after you file and get the bankruptcy discharge your house could be sold at a foreclosure sale.  (Sometimes it happens before the discharge if the lender gets the bankruptcy stay lifted).  When the house is finally sold you will be contacted by the new owner who is usually the mortgage holder.  They will then ask you when you will leave.

At this point you need to enter into negotiations with them.  Be sure to tell them that you need rent money to rent a new place and you need moving money.  Remember, it is expensive to evict you.  They cannot throw you on the street.  They would have to give you a 3 day notice and then hire an attorney and file an eviction.  They would then have to go to Unlawful Detainer court and get a judgment and then a Sheriff to remove you.  All of that takes money and time.  You might not be out for another 2 months by that formula and then they would be out filing and attorney fees.

It is better for them and you if they negotiate a “cash for keys” where you leave in a reasonable time and they give you cash for it.  Get as much as you reasonable can.  I have heard stories of around $3000 sometimes for some lenders.  Negotiate with them and get the money and then move out.  After all it was your home and you should get something as you leave out the door!

Check out my websites for more info:  www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation at (619) 702-5015.  Call now for free credit report and analysis!  I am a bankruptcy attorney in San Diego.

For a free e-book: “13 THINGS YOU SHOULD DO TO PREPARE FOR YOUR BANBKRUPTCY FILING” please send a request by e-mail to: farquharesq@yahoo.com.

Will I get kicked out of my house after I file bankruptcy?

No! Not necessarily.  You will not automatically get kicked out of your house after a bankruptcy so don’t worry.  Even is chapter 7 there is a stay that covers all of your property including your house and it is created when the bankruptcy case is filed.  A bankruptcy stay prevents any action being taken against you including evictions or foreclosures.  You will therefore not be kicked out of your house after filing bankruptcy.

The problem is that a stay in a chapter 7 only lasts for the three months of the bankruptcy.  After the three months is up the bank or landlord can proceed with a foreclosure or an eviction against you.

Once the house is sold in a foreclosure you will be contacted by the new owner who will want you to move out.  You can then ask for cash for keys.  Ask for $2000 to $3000 to move out because you will have moving expenses and new rent and deposits to pay.  Negotiate with the new owner and get what you can.  They can evict you if you do not move but they would usually rather negotiate.

A Chapter 13 bankruptcy will allow you to stay in your home if you have disposable income (income above and beyond your bills) and if you can afford the payments on the home.  A chapter 13 is a debt repayment plan where you pay back some of your creditors over a three to five-year period.  A chapter 13 will allow you to make up all of your unpaid back payments (arrearages) on your house but most people realistically can’t afford to make these payments.  Also most people prefer the speed and finality of a chapter 7.

A chapter 7 bankruptcy allows you to discharge all of your unsecured medical, credit card, and personal loan debt in 90 days and then you are done with the bankruptcy and you can move on with your life debt free.  With a 13 you have to make payments for up to 5 years.  The chapter 7 will delay the sale of your home in a foreclosure for 2 months or possibly far longer as there is no way to currently predict how quickly a lender will proceed with a foreclosure.

I am a San Diego bankruptcy attorney.  For further questions please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation about a chapter 11 bankruptcy or for any other advice about bankruptcy or debt at (619) 702-5015.  Call now for free credit report and analysis!  For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at farquharesq@yahoo.com.