Dumping a Property Before Foreclosure Can Be a Good Thing
Some individuals can be very hardheaded and when they have their minds set on something. The ability to change their minds can be quite a complex task – even when changing one’s mind or course of action would be far more beneficial than following the same course.
Case in point, when an individual falls into financial hardship and is facing foreclosure on their home they may resist offers to sell their home. This, while noble, can turn out to be a thoroughly disastrous venture. As such, it is critical to point out to the homeowner that selling the property may very well be in his or her best interests.
If there was one basic, simple psychological appeal that could be made to the homeowner it would be that foreclosure positively must be avoided at all costs. The reason for this is that with foreclosure proceedings there come a number of catastrophic hassles that may cause irreparable harm to the homeowner.
For example, if a home is foreclosed upon the credit rating of the homeowner will be devastated for a full decade. Of course, one could also seek protection against the creditors by filing bankruptcy, but bankruptcy has become significantly more difficult to qualify for as laws centering on the requirements for filing bankruptcy have become much stricter.
Additionally, the damage done to a person’s credit rating due to a bankruptcy would make borrowing money next to impossible. As such, it is significantly better to sell the property outright on your own terms than it is to suffer the disaster of having property foreclosed upon.
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Comment by Scared on 5 July 2008:
What if we don’t file bankruptcy, but we voluntarily allow the house to be foreclosed on, what happens to our credit then? We are struggling now, but when winter hits with these oil prices we will absolutely lose everything… how should we proceed?
Comment by Scared on 5 July 2008:
What would happen IF we could sell the house, but it was a “short sale”?
Comment by Foreclosure Houses on 14 July 2008:
i completely agree. before i would risk any foreclosures I would get rid of it by any means. don’t overdo it, otherwise no foreclosure houses to grab for a bargain price won’t be left
Comment by Kim on 21 March 2009:
In california can I “gut” my house and sell everthing in it (kitchen, plumbing, water heater, central heater/cooler, bathrooms, interior doors, closet doors,carpet, tile etc. while I still own it when facing foreclosure? In other words when foreclosure is eminent say in 6 months but I am still the owner while “gutting” the house? My lender is refusing even looking into a loan mod option while getting billions from the federal government and i need to sell everthing I own to pay for rental expenses. I would think I can do whatever I want with my house right?
Comment by admin on 28 March 2009:
Kim, in real estate, items attached to your house (stove, cabinets, etc.) are called “fixtures” and “belong” to the house. I have heard of people ripping all of these things out before foreclosure, but I don’t know the consequences (and wouldn’t touch advising you to do that with a 10-foot pole!). I think you need to consult a lawyer if you are really thinking of going this route. Sorry for your troubles!