Most Underwater Homeowners Not Delinquent; For Those Who Are, Tennessee Bankruptcy Can Help
Nearly one-third of U.S. homeowners - or about 16 million mortgage holders - currently owe more on their home than it's worth, according to MSNBC.com.
But while being underwater on a mortgage is often associated with foreclosure, the majority of these borrowers have managed to stay current on home payments.
On average, only 10 percent of underwater borrowers are delinquent by 90 days or more, putting them at high risk for foreclosure.
Like our Tennessee bankruptcy lawyers discussed in an earlier blog post, the state of being underwater on a mortgage doesn't affect the ability to make payments.
No one likes to hear their home is worth half of what they signed up to pay for it. But if you don't put your house for sale, you won't have to take a loss.
Often times, underwater homeowners struggle to pay the mortgage because of other circumstances.
The most common sources of trouble are excessive credit card debts and expensive home equity loans taken out when home values were much higher.
Over time, these obligations put substantial pressure on family finances. When homeowners hear that real estate prices are falling, it's easy to shift the blame to the economy when it's really our debt that's the problem.
But while you can't change your home's value, you may be able to change your debt situation.
By filing for Chapter 13 bankruptcy Tennessee homeowners can restructure most types of debt, often eliminating some or all unsecured debts like outstanding credit card balances and medical bills.
Meanwhile, Chapter 13 works to legally protect property - including your home - from repossession. Whether you've missed your first mortgage payment or are already in the foreclosure process, Tennessee bankruptcy can stop the bank from taking your home.
Home value is just a number. With freedom from debt, many Tennessee homeowners find they can more easily pay the bills - and enjoy their home - without fretting over the real estate market.
If you think Chapter 13 bankruptcy may be right for you, call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 for a free one-on-one debt evaluation with one of our experienced Tennessee bankruptcy attorneys.
More Blog Entries:
Debt, Not Declining Home Values, Leads to Mortgage Struggles and Foreclosures in Tennessee: May 8, 2012
Local Home Sales Rebound, but Tennessee Foreclosures Continue to Drag Down Property Prices: April 13, 2012
Additional Resources:
One in Three Mortgage Holders Still Underwater, by John W. Schoen, MSNBC.com