Atlanta Attorneys Say Unemployment Doesn’t Have to Equal Foreclosure
When an acquaintance of mine lost her job, her first priority was to continue feeding her kids. Her second priority? To find another job - so she could continue feeding her kids. Needless to say, she spent most of her time searching for work and none too much time worrying about the mortgage.
The good news: three months later, she found a new job (she was a smart, educated woman, so it was only a matter of time). The bad news: she lost her home to a short sale in the process. She stopped making payments and ultimately gave up.
Apparently, her story is becoming more and more common. According to this Washington Post article, unemployment - rather than subprime mortgages - is now the leading cause of foreclosures. Since the unemployed don't have steady income, they're even less likely than most to qualify for loan modifications. And even when they do find work again, they're often unable to catch up on their mortgage because of late fees their lenders levied on delinquent payments.
But it doesn't have to be like that. Bankruptcy is a way to potentially stop foreclosure and free yourself from debt in the process - even if you're dealing with unemployment.
I certainly don't blame my friend for worrying about her family over her mortgage. But that's not why she lost her house. She lost her house because she wasn't proactive. If she had filed for bankruptcy, she could have stopped foreclosure and made her mortgage payments more manageable by reducing - maybe even eliminating -debt payments.
If you qualify for Chapter 13 bankruptcy, an automatic stay can legally prevent foreclosure while allowing you to pay down debt in affordable increments. Often, this is the best bet for someone who accumulated debt during an emergency - such as a layoff - but now has enough income to make scheduled (albeit smaller) payments. If you don't have a steady source of income, you might be a better candidate for Chapter 7 - in which your debt will be mostly or completely discharged. Though Chapter 7 can require you to give up some assets in exchange for the discharge, there are many exemptions - for instance, most necessities and the equity in your home up to a state-designated amount.
Sound complicated? Don't worry - a professional bankruptcy attorney can help you identify a bankruptcy plan that's fits your present financial situation. All it takes is signing up for our free personal debt analysis, an hour-long, no-obligation session with a DebtStoppers attorney in Atlanta or Chicago. When you lose your job, it makes sense to devote your time and energy to finding work. Let us take the burden of debt off your shoulders in the meantime.