We thought the economic crisis hit us a couple of years ago. You have to wonder about that. We have unemployment at 10%, record mortgage foreclosures (there are more foreclosures pending today than during the peak of the recession), and bankruptcy appears to becoming a national past-time.
According to Time Magazine, by the end of 2010, one million homes will have be foreclosed upon. Those are scary numbers, especially if you’re one of those who have been hit hard by the recent financial downturn. In many cases, foreclosure can be avoided, but it can take careful planning and really does need the advice of a bankruptcy attorney.
If you are suffering financial hardship and you wish to keep your home, the best thing you can do is keep your mortgage payment as up to date as possible. Your other debts may suffer as a result of this, but if your mortgage is not terribly delinquent then it is possible to keep your home. If you feel that foreclosure is close then making a bankruptcy application will at least stall this process.
Under a Chapter 13 bankruptcy, a permanent stay is put in place against all creditors thus preventing them from taking any action. Under the normal course of a Chapter 13 application, you can negotiate to repay the overdue amounts over a 3-5 year period. A mortgage is considered to be a non-dischargeable debt so it won’t be wiped through the bankruptcy process. However, if you have other debts that can be pushed to one side, this may free your finances and so save your home.
Chapter 13 bankruptcy petitions can be quite complicated when a home mortgage is included. This requires the skill of a bankruptcy professional who can guide you through the process. At the end of the process, rather than being another foreclosure statistic whose home has been sold off cheap, you could be one of the lucky ones that walks away as a home owner.
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