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Try and Save Your House From Foreclosure by Filing Bankruptcy

Back in 2008 the national debt was at $ 10.02 trillion, now that number is closing in on $ 18 trillion. It's crazy to think that it's almost doubled in five years. Back when the too big to fail banks failed because of the mortgage derivatives, the government got together and said they were putting in stops to keep that from ever happening again. Five years later, there has been $ 2 trillion in stimulus bills and over $ 4 trillion printed out of thin air. It doesn't seem like anyone has learned any lessons whatsoever. Recently, I was speaking with a friend from the mortgage industry in California and he was telling me how prices are now are on par with those back in 2007. Wait a minute, I thought the reason the housing market collapsed was because the bubble was created and now it appears that that bubble is back and is ready to burst again. Recently, hedge fund, Blackstone equity group stated they were going to begin dumping all the real estate they purchased back at the bottom of the market. From what it sounds like, they believe this new bubble that is much larger is ready to burst. What does this mean for the average Joe? Seems to me that we are going to see the downturn in real estate prices like never before followed by mass foreclosures.

It doesn't take a rocket scientist to figure out that what goes up must come down. Vertical spikes on a graph are not healthy when it comes to real estate. While it is great for the real estate speculator, it's disastrous for the middle-class homeowner. Around 2005, many middle-class Americans ran out to buy their home that they couldn't afford before the market ran away from them. Even though they could afford it they were allowed to do so because of banks giving stated income loans. Essentially, these banks were setting these hard-working middle-class Americans up for failure as they sold off these loans as derivatives many times over. It was recently reported that JP Morgan Chase has close to $ 2 trillion in total assets while its exposure is over $ 71 trillion. I don't know about you, but I'm in the camp that this is not going to end well for the United States.

Especially in today's economy, no one is immune from losing their house to foreclosure. It's important to be prepared for any financial situation that we might face in this fragile economy. Right now, there are close to 5 million homes in default, pre-foreclosure and foreclosure. Looking at these numbers is frightening because this means the economy is not turning around but sliding down a slippery slope. Even though the media keeps reporting of financial recovery and unemployment of 6.7%, it all doesn't add up when you look at the real numbers. There is a large shadow stock of real estate that has to hit the market before anything can turn around. The people behind on their payments should consider speaking with a bankruptcy attorney so they are prepared to file bankruptcy if necessary. Some individuals might not need to file immediately but are going further and further into the hole and if things don't turn around it will be in their future.

There is light at the end of the tunnel because filing bankruptcy will stop foreclosure. This is something that is important to remember especially during these economic times. A recent study came out saying the average American is three weeks away from filing for bankruptcy. The thought behind this study was most Americans are robbing Peter to pay Paul and just kicking the can down the road barely getting by. Living paycheck to paycheck will at some point end up in a bankruptcy filing unless the individual is very lucky. Living like this leaves a person in a situation where they are just one small disaster away from losing it all. All it will take is the car to break down, a job loss or an illness and filing bankruptcy will be the only way to get out. As a rule of thumb, in this economy people should prepare for the worst and hope for the best.

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