Bankruptcy, Short Sale, & Credit Report

Due to a job loss, we filed Chapter 13 bankrupcty in hopes of saving our home. 

Unfortunately we were still not able to make our mortgage payments and have moved to a rental. 

The Trustee has lifted the stay for the 1st mortgage holder to foreclose. 

We received a call today from a mortgage solutions company that says they will work with us, at NO cost to us, to obtain a short sale on our home and save us some damage to our credit.  Is that possible? 

Will not having a foreclosure on our credit actually help our credit even with a bankruptcy already on our credit? 

Should we pursue this company’s help? 

Is there actually no cost to us?

Thanks
Martha

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Hi Martha,

I can’t vouch for the company that contacted you, so I can’t answer the second and third questions you’ve asked. 

“Will not having a foreclosure on our credit actually help our credit even with a bankruptcy already on our credit?”

It probably won’t help or hurt the mortgage tradeline, since the FCRA requires the tradeline to stop reporting once the bankruptcy case number is issued. 

It will help to avoid the public records entry of foreclosure. 

In addition, the successful completion of a short sale may make it possible for you to re-enter the housing market much sooner than a foreclosure. 

Read: Violation of the Discharge Injunction – Boo-Yah!, Bankruptcy & Short Sale, Short Sale Bankruptcy, and Mortgage After Short Sale

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.