Chicago New Home Sales Slip In June Making Bankruptcy a Good Option
A story by CNNMoney reports that new home sales in Chicago and nationwide fell again in June for the second straight month, continuing concerns that the real estate market has yet to fully recover from the Great Recession.
Falling home prices have left many people with mortgages on houses that are upside down in Chicago looking for answers. One answer is filing for bankruptcy in Illinois. Bankruptcy laws allow the foreclosure of a home to immediately stop, stop creditors from calling and wages from being garnished.
The story reports that 312,000 homes were sold in June, which was down from 315,000 in May. The June numbers are actually up 1.6 percent from June 2010, however. But despite the uptick from 2010, economists predicted 320,000 sales.
With a flood of foreclosed homes on the market, new home sales have been one of the weakest sectors of the economy. In July 2005, there were 1.4 million new home sales, the peak. After June's sales, there are 164,000 new homes on the market, which experts believe will take more than six months to sell through that inventory.
According to the S&P/Case-Shiller report, home prices increased about 1 percent in June over May. In Chicago, prices rose 1.7 percent from April to May, but prices are still down about 8 percent from 2010.
Prior to the last few years, buying a home seemed like a good investment. It was considered a good form of bad debt, like student loans, because it was likely it would pay off in the long run. Well, the long run is much longer in just about every part of the country.
With millions of houses in foreclosure, on top of new homes that are being built, the inventory in this country is massive. And the foreclosures have sunk home values. Six-figure houses are now selling for five figures because of the collapse of the market.
And that has trapped many homeowners in their homes, which are now worth much less than the mortgage they are paying. For some, the bad job market, coupled with an expensive house payment, has left them unable to manage.
But there is hope in bankruptcy laws. Whether a house is scheduled to be sold on the courthouse steps tomorrow or if the homeowner has just recently begun missing monthly mortgage payments, bankruptcy can help.
Filing for bankruptcy immediately stops the foreclosure process. It also stops creditors from calling, collection agencies from harassing you and lenders from attempting to garnish a person's wages. The consumer gets protection throughout the process, until a final order is signed.
There are different forms of bankruptcy, however. In Chapter 7 bankruptcy, the most common, debts are forgiven. But this requires passing a means tests to determine how much money a person has and can make.
In Chapter 13 bankruptcy in Chicago, large assets, such as a home, are protected and consumers set up a payment plan, usually over 3 to 5 years, to pay back debt. Which chapter the bankruptcy is filed under depends on the person's circumstances.
But the first step should be consulting with a Chicago Bankruptcy Lawyer, who can assess your situation and determine the best course of action. Bankruptcy laws are designed to give consumers a second chance and they can provide much-needed relief when people believe they have nowhere to turn.
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.
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Chicago Bankruptcy Lawyers note Government Moves to End Failed Foreclosure Assistance Program: April 5, 2011
Additional Resources:
New home sales slip again in June, by Blake Ellis, CNNMoney