Bankruptcy Stops Foreclosure By Getting to the Root of Mortgage Problems
Imagine having the best interest rate, decent loan terms and an affordable payment - but still losing your home to foreclosure. It might sound nonsensical, but it's happening to millions of Americans right now.
Rates are the lowest they've been in years. Uncle Sam has coughed up $75 billion in taxpayer money to encourage banks to modify mortgages (though, unfortunately, it's often more lucrative for banks to keep you delinquent). But foreclosures continue to rise because of a simple fact: Americans are in the hole.
Most of us have tens of thousands of dollars worth of credit card, medical and IRS debt. To make matters worse, the cost-of-living is going up while unemployment is on the rise. Our wallets are shrinking faster than ever - and we have to decide how to allocate what's left.
When you've got creditors harassing you on the phone or the IRS knocking at your door, it can be all too easy to put off this month's mortgage...and next month's mortgage, and the one after that. Before you realize it, you have a foreclosure notice in the mail. Even some of the few folks lucky enough to have their mortgage terms modified are finding themselves ready to default for a second time.
But there's good news - the situation isn't as hopeless as it sounds. We've been blaming mortgages for foreclosures, and that's an oversimplification. When faced with a multifaceted problem, you need a multifaceted answer. That's why more and more homeowners are turning to Chapter 13 bankruptcy.
Unlike reworking your mortgage terms, which only affects one of your debts - your house payment - filing for bankruptcy protects you in several ways. It legally stops creditor actions like foreclosure and repossession. It allows you to develop a repayment plan based on your individual abilities. And, in turn, it frees up money that would have gone to those credit card debts, tax debts and medical debts that you've now eliminated.
Also unlike the mortgage modification process, finding out if you qualify for bankruptcy is easy - and absolutely free when you sign up for a complimentary personal debt analysis with one of our Chicago bankruptcy attorneys. Sometimes getting to the bottom of a problem is the best way to get back on top. Bankruptcy can help you get there.