Ask Andy: Bankruptcy & foreclosure - WMC Action News 5 - Memphis, Tennessee

Reported by Andy Wise

Ask Andy: Bankruptcy & foreclosure

The sky is falling on "Elizabeth's" family in South Memphis.

Her e-mail says her step-father lost his job.  Doctors diagnosed her mother with breast cancer.  Now her mother might lose her job, too:

"They are about to lose their house and my Uncle said that if they file for bankruptcy they can live in their house for a year without losing it. Is that true?"

No, that's not true.  Bankruptcy is not the solution.

We have enough bankruptcies in the Mid-South, and they're killing everybody's credit.

In fact, bankruptcy attorney Bruce A. Ralston ( says a standard Chapter 7 bankruptcy might let Elizabeth's parents stay in their house another three or four months at the most, but the lender will eventually get the house. Then they'll have both a bankruptcy and a foreclosure on their records.

Not the way to go.

Ralston says if Elizabeth's parents have not foreclosed yet, they should seek a HUD-approved counselor to help them stay in their home.

The Memphis Housing Counseling Network can connect them with a counselor free of charge.  In fact, you should never have to pay for a HUD-approved counselor. The service is supported by our tax dollars.

Reach the Memphis Housing Counseling Network here:  901-725-8361 or

You can also go to the FHA site at or call HUD's housing counseling and referral line at 1-800-569-4287.

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