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Bankruptcy or Foreclosure: Which is Better?
By admin | June 10, 2008
There has been an ongoing debate for many experts about choosing which is a better option, bankruptcy or foreclosure? Actually the answer is NEITHER.
Anyone of these options is bound to stick to your credit report for many years. It will come up when you apply for a credit card or even when you purchase a car or home. Being considered a credit risk will naturally mean higher interest rate for you.
If you are already having trouble making ends meet, you should probably try to really look at your finances. You will be probably surprised that there are plenty of ways that you can cut back your spending. If you are already living on a very lean budget, the next thing you should consider is looking for other sources of income. You could also ask for some financial assistance from your family or friends especially if your financial woes are not for long term.
Of course, there is always the option that most distressed homeowners choose and that is to negotiate with their lenders in order to come up with a new repayment plan for your mortgage loan. This option should only be explored if you have determined that you can afford your home. You should really not hold on to your home if your finances do not permit it. You will probably end up losing your home to foreclosure, paying huge amount in taxes and on top of it all, filing for a bankruptcy.
For distressed homeowners who think that bankruptcy is the only way to go, it is best that you consult a lawyer. You will need to first determine which between Chapter 7 and Chapter 13 Bankruptcies suit your financial situation. If this option works out for you and you are given a fresh start, you must make sure that you do not make the same mistakes all over again.
As experts always say prevention is better than cure. You should work hard in trying to stay away from a bankruptcy or foreclosure.
Topics: Bankruptcy, Foreclosure |