Unemployed Homeowners Get Temporary Reprieve From Foreclosure
The Obama Administration recently announced that it wouldn't allow lenders to foreclose on unemployed homeowners until they miss more than a year of monthly house payments, The Washington Post reports.
While this is temporary good news for homeowners, it's more of a stopgap measure than a real solution. The Federal Housing Administration previously required banks to allow its borrowers to put off mortgage payments for four months while lenders worked out options to keep people in their homes. The national unemployment rate was 9.1 percent in May, while it sits at 8.7 percent in Illinois.
Chicago Bankruptcy Lawyers have seen many desperate homeowners, especially those who are unemployed and scrambling to keep their houses, seek out home loan scams and other programs in the hopes of keeping their homes. But as people remain unemployed, their credit card debt typically increases, leading to extended debt. Some homeowners consult with experienced bankruptcy lawyers and conclude that Chapter 13 Bankruptcy in Illinois is the best option.
The Treasury is expected to ask lenders for a similar deal under its primary foreclosure prevention program, but it lacks authority to require it. As many Americans have discovered, bankruptcy can be a much-needed procedure to get ones finances bank in order after debt piles up.
Through June, there were 709,303 consumer bankruptcy filings, which was actually a slight decrease from about 770,000 during the same period a year ago. But the 119,768 filings in June represented a 4 percent increase from 114,803 filed in May.
Chapter 13 bankruptcy in Illinois means consumers are able to come up with a payment plan that lasts three to five years and allows people to keep their homes if they complete the payments on schedule. People often think of bankruptcy in terms of chapter 7, which is designed for people with few assets and mounting debt; their debts can be consolidated and wiped out through a successful bankruptcy procedure.
Chapter 13 is different because it helps people who have assets, but who have gotten into trouble with mounting debt. As soon as a person files for bankruptcy, creditors stop calling, collection agencies aren't allowed to bother you and your Chicago Bankruptcy Lawyer takes charge and begins working on your case.
This is a complex process and requires a law firm that has helped countless homeowners struggling with debt. Costly medical bills are the number one reason for bankruptcy and with our economy dragging and not producing as many jobs as expected, unemployment is at the top of the list of reasons why a person might consider to file for protection.
Bankruptcy law is designed to help consumers who are serious about fixing their debt problems. It is one area of law that provides protection for consumers and lets them work through their debt in order to move forward.
But keep in mind that the sooner you take action, the sooner you'll be able to get rid of the mound of debt that is causing problems in your life. So, while the President's plan to give unemployed homeowners some extra time off from making payments may help some, high unemployment rates may make it near impossible to get out of debt and keep one's home. But filing for bankruptcy is the one definite way to stop creditors and work to keep your home when debt is getting the better of you.
If you need to speak to a Chicago bankruptcy attorney call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 today for a free debt analysis. Call 800-440-7235.
More Blog Entries:
Obama admits misstep on housing, extends help to jobless homeowners, by Peter Wallsten and Brady Dennis