Despite Recent Drop, Foreclosures Expected to Rise Again Before the Market Improves

For homeowners at risk of foreclosure, watching the real estate market can feel like a roller coaster ride of ups and downs.

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In July, foreclosure filings fell 3 percent from the previous month and a whole 10 percent from a year ago, according to RealtyTrac data. That's the good news.

The bad news is that foreclosure starts - or the notices sent to delinquent mortgage holders to signify the first stage of foreclosure - actually increased for the third month in a row in July. Compared to last year, foreclosure starts are 6 percent higher.

Even though home prices are finally rising in some U.S. regions, experts say the real estate market won't be in a position to rebound until next spring. In fact, some of the neighborhoods that realized gains this summer are expected to see prices drop again by autumn.

But just because the real estate market is troubled doesn't mean individual homeowners have to be.

A foreclosure notice, while intimidating, doesn't always mean a death sentence for home ownership - if you take action quickly, that is.

Negotiating a loan modification is one way to make paying debts - and avoiding foreclosure - more manageable. Unfortunately, not all lenders are willing to work with borrowers and even if they are, the modification process itself can be costly and time-consuming.

For many people, Chapter 13 bankruptcy is a better solution.

Also known as wage-earner's bankruptcy since it applies to homeowners earning an income, Chapter 13 allows a bankruptcy filer to combine unsecured debts such as credit card debt and medical bills into a monthly payment program for 3 to 5 years. At the end of this period, remaining debts are usually discharged.

Not only can a Chapter 13 bankruptcy filing allow delinquent borrowers to catch up on payments, but it also has the power to stop foreclosure. As long as you stick to your payment schedule, you won't have to deal with creditor harassment, repossession, or losing your home.

Whether the housing market hits rock bottom today, tomorrow, or yesterday doesn't really matter. What does matter is your ability to pay the mortgage. If you're struggling to stay in your home, bankruptcy may make it possible.

Want to know if bankruptcy can help you fend off foreclosure? Call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 for your complimentary personal debt evaluation with one of our experienced bankruptcy attorneys.

More Blog Entries:

As Georgia Foreclosure Activity Spikes, Atlanta Bankruptcy Offers Relief: June 19, 2012

For Young Consumers Burdened by Debt, Bankruptcy Can Be Smart Long-Term Solution: August 6, 2012

Additional Resources:

Foreclosures Fall Again in July, by Les Christie, CNN Money

Real Recovery in Home Prices Not Expected Until Next Spring, by Les Christie, CNN Money

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