"I can't make my mortgage payments."
You're behind a few months on your mortgage. The first payment went by, and then the next-the money just wasn't there. You don't want to lose your home, but you don't want to lose your credit, either. You can let the house go into foreclosure, declare bankruptcy-or you can apply for something called a short-sale.
A short sale is when an owner cannot make payments on the balance of house, so the bank "allows" him to sell the house for less than the remaining balance. The bank gets at least some of the money it is owed and the owner is released-if only partly-from his debt on the house.
The thought of losing your home is unbearable-but making the wrong choice to settle your debt could end up costing you even more. Here are a few facts about foreclosures and short sales in Arkansas:
- In a short sale, your house will be listed on the market and must be available for walk-throughs of potential buyers. If you choose foreclosure, you and your family can remain in the house throughout the length of the foreclosure process, which can take years.
- Foreclosure and short sales affect your credit score with equal weight. While filing bankruptcy in Arkansas often costs slightly more points to your credit, it will also offer you a chance to begin building good credit once outstanding debts have been cleared.
- You cannot simply opt for a short sale-you must apply for one through your lender, often including a letter or statement of financial hardship. If you are approved for a short sale, the bank has power over the new home buyer's offer. If for some reason the offer is rejected, the house stays on the market and the process is repeated until a new buyer is accepted.
- Since the home must remain available to the public for open houses, many families in a short sale situation will choose to live elsewhere for the months or years it can take to sell the house-meaning they must pay rent on another property, and go deeper into debt.
- An alternative to short sales and foreclosures, filing Chapter 13 with an Arkansas bankruptcy lawyer would allow you to keep your home.
Although no one likes the thought of declaring bankruptcy, it could be the best solution to get you out of debt. To find out your debt relief options today, call Butler, Horn, Nye & Johnson at (501) 315-5297 and get advice from a trusted Arkansas bankruptcy attorney.
We proudly serve clients located in Central Arkansas including: Benton, Bryant, Conway, Little Rock, North Little Rock, Russellville, Hot Springs, Cabot, Searcy, Jacksonville, Malvern, Arkadelphia, Sheridan, Sherwood, Maumelle, Mayflower, Pine Bluff, and all cities surrounding Saline, Pulaski, Grant, Garland, Hot Spring, Perry, Conway, Faulkner, Pope, White, Clark, Lonoke and Jefferson Counties.