Home Equity Loss Not the Real Cause of Homeowner Debt in Atlanta
Despite a rise in existing home sales earlier this year, the media reports that home values are still dropping - and that the decline may only get worse as banks began releasing a new round of foreclosures onto the market.
As usual, the negative news has sent homeowners into a panic over the thought of losing even more home equity.
But the American obsession with home value may be preventing us from seeing the real problem - and, thus, the solution - to our financial troubles.
As our Atlanta bankruptcy lawyers often explain to clients, primary residences were never meant to be investments.
In our parents' and grandparents' day, a house was a place to live, to raise a family, and to create a lifetime of memories. But as home prices soared at the approach of the new millennium, our perceptions began to change.
Americans stopped looking at houses as homes and began viewing them as a means for keeping up with the Joneses.
By taking out home equity loans and using skyrocketing values as an excuse to allow spending to exceed income, American consumers amassed an unprecedented amount of debt.
When home values began to fall, we used the loss of equity as a scapegoat for our debt troubles.
In reality, it doesn't matter what your home is worth unless you're trying to sell it. Home equity has nothing to do with a borrower's ability to pay the mortgage or fight off foreclosure.
Housing numbers are merely a distraction from the real source of the problem - our out-of-step finances. Simply put, we have too much debt.
But there's good news. Because financial troubles aren't caused by the real estate market, families don't have to wait for the market to improve to fix their finances. Often times, an Atlanta bankruptcy plan can stop foreclosure, halt wage garnishment, and eliminate most - if not all - of a family's debt.
Filing for bankruptcy can be an affordable way for Americans to protect their interests and find a fresh financial start.
Without the burden of stress, Atlanta homeowners - like the many generations before us - can finally experience the true joys of home ownership.
If you'd like to learn about your options for staying in your house, call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 for your complimentary one-on-one debt analysis with one of our experienced Atlanta bankruptcy attorneys.
More Blog Entries:
Existing Home Sales Up, Inventory Down - For Now, by Constantine von Huffman, CBS News