Chicago Foreclosures Get Cash Boost Under Mayor’s Plan

Nine neighborhoods struggling with foreclosed homes throughout Chicago will get an infusion of money under a $20 million loan pool proposed by Mayor Rahm Emanuel.

This new program may help some homeowners who have fallen behind on monthly mortgage payments, but it won't stop foreclosures altogether. Filing for bankruptcy in Chicago, will, however. An experienced Chicago Bankruptcy Lawyer will tell you that once you file for bankruptcy, all debtors you owe are banned from collecting or contacting you. Even if your home is scheduled to be auction, the process stops while bankruptcy starts.
This set of laws is designed with the consumer in mind and allows for a fresh start if debts are piling up. After passing a means test for Chapter 7 bankruptcy and showing the debt vs. any income or assets a person may have, most people can have their debts completely discharged. It allows for people to enjoy a freedom they may have forgotten after battling creditors for years and dealing with wage garnishments and high interest rates.

Under the mayor's plan, according to the Chicago Sun-Times, the money will be used to attack "small sub-sections" of nine neighborhoods that have been most affected by the economic downturn:

  • Humboldt Park
  • Chatham
  • Chicago Lawn
  • West Woodlawn
  • Auburn-Gresham
  • West Pullman
  • Belmont-Cragin
  • Englewood
  • Grand Boulevard

The goal of the program is to turn 2,500 houses that are sitting in foreclosure and unoccupied into owned homes over the next several years with the help of $20 million in loans through the John T. and Catherine D. MacArthur Foundation.

By using that money, the mayor expects to leverage private money -- mostly from area banks -- to up the total amount to around $50 million. The money will be used either to help underwater homeowners -- those who owe more on their mortgage than their house is worth -- provide incentive packages for potential buyers and renovate existing foreclosed homes that have become worn down.

The newspaper reports that in 2010, 10,500 homes went through the process of foreclosure in Chicago, an increase of 20 percent from 2009. About 95 percent of those houses are now vacant.

Because of the Great Recession, which killed jobs, tightened credit and affected every American, foreclosure has become rampant in many parts of the country.

Home values have been slashed -- sometimes by 2/3 of what the owner paid -- and people have had to walk away from houses because they are jobless and can no longer afford to make monthly payments.

But filing for bankruptcy stops foreclosure in its tracks. Whether one payment has been missed or a dozen, bankruptcy stops the process and allows people to stay in their homes while it is going on. A Chicago Bankruptcy Lawyer and bankruptcy officials work to determine if the person qualifies and then your attorney works to help you get rid of the years of debt that has been making life difficult.

If you need to speak to a Chicago bankruptcy attorney call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 today for a free debt analysis. Call 800-440-7235.

More Blog Entries:

Chicago New Home Sales Slip in June Making Bankruptcy a Good Option: August 16, 2011

Unemployed Homeowners Get Temporary Reprieve From Foreclosure: August 12, 2011

Additional Resources:

Rahm Emanuel announces $20 million loan pool to target foreclosures, by Fran Spielman, Chicago Sun-Times

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