New Home Sales Fall While Congress Debates Extending Tax Credit

The economy is picking up momentum, but it's not necessarily going to be a smooth ride.

Case in point: sales of new homes recently dropped for the first time in six months. Until now, home sales had been on the upswing since the market hits its roughest patch this January.

You can blame the decline on the fast-approaching expiration date for a temporary homebuyer tax break. The credit, which gives qualified homebuyers a tax break of up to $8,000 for their purchase, ends Nov. 30.

That might seem like bad news for wannabe homeowners - and for the economy - but it shouldn't mean the end of opportunity. Right now, Congress is debating whether to extend the credit through next March, fading it out slowly after that. Besides that, mortgage rates are the lowest they've been in years and there is no shortage of affordable homes on the market. And maybe most significantly, there are other ways to save up for a house - including bankruptcy.

If you're looking for a home anyway, there's nothing wrong with taking advantage of a tax credit. But most of us have access to another sort of credit - the kinds of savings we get when we shake off our debt burden. If - like most folks - you're shelling out a big chunk of change each month to your credit card bill, car loan or other obligations, you have more flexibility than you might think. Eliminating those debts will eliminate monthly payments and interest - money you can sock away for that mortgage, rent or whatever else you need - not to mention the stress of struggling to pay ever-growing bills.

Of course, if you're on the other side of the fence - let's say you're fighting to keep a home you've already purchased - there's hope for you, too. Filing for Chapter 13 bankruptcy will not only free up more cash for your mortgage, but will legally protect your home from foreclosure - whether you've missed your first payment or have already received notice of foreclosure from your bank.

Find out for free how a bankruptcy plan can put (or keep) you in a home of your own with a complimentary personal debt analysis, a one-hour consultation with one of our professional Chicago bankruptcy attorneys.

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