Too Much Borrowing, Not Loss of Home Equity, Is Root Cause of Debt in Chicago
The real estate market is seeing some promising signs of recovery - for instance, sales of existing homes are up slightly - yet prices are still falling.
As banks release formerly-held foreclosures onto the market, home values are only expected to drop further.
But while many homeowners are panicking at the prospect of being underwater on their mortgages, the loss of home equity probably isn't their real problem.
Our Chicago bankruptcy lawyers often point out that borrowing against home equity, not the decline of home values, is what has landed so many Americans in hot water.
In the past, a home was a safe shelter, a place to raise children, and a source of pride. No one expected to make money off their primary residence; they were content to just live in it.
Somewhere along the way, we stopped looking at houses as homes and began treating them as investments. Because homeowners speculated that value would increase rapidly, they allowed themselves to borrow against home equity and charge expenses that vastly exceeded income.
When the housing market didn't behave as hoped, many homeowners were left with debt.
With the media so focused on housing numbers and foreclosures, it's easy to shift blame to the national economy. But for most of us, the root of the problem is our family economy.
A loss of equity means little unless you have to sell your home. It's the overwhelming debt that usually leads to trouble paying the mortgage.
But this may be good news. While there's no guaranteed way to restore home equity, it is often possible to eliminate debt.
For homeowners behind on mortgage payments and struggling with debt, Chicago bankruptcy may be able to help. By filing for bankruptcy in Chicago, it's frequently possible to stop foreclosure, prevent repossession, and lower - if not entirely eliminate - debt.
With relief from the burden of debt, you and your family can experience the true value of home ownership.
If you'd like to discuss your options for staying in your home, call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 for your free one-on-one debt analysis with one of our experienced Chicago bankruptcy attorneys.
More Blog Entries:
Existing Home Sales Up, Inventory Down - For Now, by Constantine von Huffman, CBS News