Is bankruptcy the best option after foreclosure? 7 Answers as of June 10, 2011

My parents home foreclosed and also have a summary judgement against them.The summary judgement was place because they were unaware due my father's illness and the attorney did not tell about court dates. My parents have evidence of where they were during the court date. They were able to find a buyer to purchase the home for short-sale. The mortgage company has agreed to the short-sale but will not remove summary judgement from credit report. The summary judgement removable will enable my parents to get back to starting a business they use to have. Now, they will have to file chapter 7 bankruptcy. I do not understand why and are there any more options for them.

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Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
The mortgage company is not going to release the Summary Judgment because they now have a Court Order demanding that your parent's pay the deficiency on the mortgage. Your parents will have to either settle the matter - which if the mortgage company is unwilling will not happen, or file Bankruptcy to eliminate their liability on the Summary Judgment.
Answer Applies to: New Hampshire
Replied: 6/10/2011
Law Office of Maureen O' Malley
Law Office of Maureen O' Malley | Maureen O'Malley
I don't know what state you're in, so I can't respond fully. If the bank approved a short sale, the judgment should have been satisfied. State law may have a mechanism for requiring that they mark it as such. The bank may be unwilling to mark the judgment as such if there is money still due after the short sale. If this is the case, bankruptcy will eliminate all debt and give your parents a fresh start.
Answer Applies to: Virginia
Replied: 6/9/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
I am not certain I fully understand your question. I am guessing that when you say "summary judgement" you mean an actual judgement. I have no idea what the amount of it is, but I suspect they may need to file bankruptcy to resolve it. They should consult with a lawyer because it would be important to know what their assets are in making the decision to file or not file or what kind of bankruptcy to file.
Answer Applies to: California
Replied: 6/9/2011
Bird & VanDyke, Inc.
Bird & VanDyke, Inc. | David VanDyke
I'm not sure I completely understand your question but unless you can make some other agreement with creditors who you promised to re-pay sometimes bankruptcy is the only answer.
Answer Applies to: California
Replied: 6/8/2011
Daniel Hoarfrost, Attorney at Law
Daniel Hoarfrost, Attorney at Law | Daniel Hoarfrost
I can't tell all the necessary facts from your description of the problem. It's not clear what there was a summary judgment for. It may be possible to go to the trial court and file a motion to "satisfy" the judgment. It depends a little bit on how the judgment is written. Otherwise, a bankruptcy can remove the judgment.
Answer Applies to: Oregon
Replied: 6/8/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Once the foreclosure was completed certain obligations occurred. There may have been a tax event due to the foreclosure and the summary judgment against them. Since they no longer own the property they cannot do a short sale. Bankruptcy may be an option to discharge the summary judgment. This may or may not be advisable. This serious matter requires the advice of a certified specialist in bankruptcy. Contact the State Bar website for a recommendation of an attorney in your area.
    Answer Applies to: California
    Replied: 6/8/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    You sound confused. Summary judgments cannot be removed. That means they lost a court case. That judgment, and a possible deficiency on the home, may be excellent reasons for a person to file bankruptcy, depending on their present income, expenses, debts and assets. A bankruptcy may prevent adverse consequences from the judgment and they need to see a lawyer.
    Answer Applies to: Georgia
    Replied: 6/8/2011
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