Could Bankruptcy Help Struggling Homeowners Avoid Foreclosure?
It looks like troubled homeowners may soon have a better option for modifying home loans, according to Chicago bankruptcy attorneys.
A new bill backed by Sen. Sheldon Whitehouse suggests that the federal government consider allowing bankruptcy to be used to modify the mortgages of the millions of Americans at risk for foreclosure. Currently, the best aid Uncle Sam has mustered is the failing Home Affordable Modification Plan, which has barely assisted 500,000 of the four million homes it set out to save. Clearly, homeowners need a better solution.
It's not that modifying mortgages doesn't work - it's that it doesn't work for enough people. While some folks have found relief with the loan modification program, many more have fallen between the cracks of an increasingly bureaucratic financial system. Even the lucky ones who manage to wade through the red tape can end up paying so much in time and money that any mortgage savings are more than erased.
Chapter 13 bankruptcy, on the other hand, is a sure thing. As soon as you file, any foreclosure proceedings are stopped, an automatic stay goes into effect to protect you from creditors and, currently, an affordable repayment plan for your non-mortgage debts is worked out. If the new bills passes, you may be able to alter you mortgage debt as well.
There's a reason millions more people choose bankruptcy each year - it really works. If you've ever wondered if bankruptcy is right for you, stop waiting and find out with a free personal debt analysis courtesy of a Chicago bankruptcy attorney. It's predicted that by 2012, the U.S. might see 12,000 foreclosures - at DebtStoppers, we can help make sure your house isn't one of them.