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Home in Foreclosure? File Bankruptcy

Over the recent years, most Americans have heard quite a bit about the foreclosure problem and how many Americans have had to file bankruptcy to stop creditors from their aggressive behavior. Because there is so much information out there, many Americans have become armchair lawyers and offer up their opinions to their friends and family members. Everyone has an opinion and has their story, but what an individual needs to do is decipher the truth from exaggeration. It's best to cut to the chase and talk to a bankruptcy attorney, but some folks kick the idea around for a while and listen to their friends and family members before they do something about it.

In January 2014, one in every 96 homes nationally was in foreclosure. This is up 8% from the end of 2013. Back in the summer of 2013 it was reported that the housing market had turned around and foreclosures are at their lowest rates since 2007. Everyone thought the economy had turned a corner and we were back to normal. The grand total of foreclosures for 2013 was 1.36 million properties nationwide. Despite all this "good news", in December of 2013 9.3 million properties or 19% of all homes nationally were considered deeply underwater. This term means that the homeowner owes 25% more than the home is even worth. Even though over the last couple years home prices seem to have rebounded somewhat, some areas are coming close to their 2007 highs when the real estate bubble bursts. This leads the skeptics to believe another bubble has been created and is on the verge of popping. Those that are barely hanging on are once again being faced with the threat of losing their home to foreclosure. The government recently reported that unemployment is now at 6.5%, the media continues to bang the drum saying the troubles are behind us. When you look at the real numbers, you'll see the employment population ratio is down to 56%. If unemployment is 10% back in 2008 and the employment to population ratio was 63%, how could the unemployment rate be 6.5% if the employment to population ratio is now down to 56%? It's obvious, less people are working and are no longer receiving unemployment insurance, thus have fallen off the radar. Those that believe the mainstream media need to take off the rose-colored glasses and get a reality check. When I was a kid, my dad used to always say, if it sounds too good to be true, it is too good to be true. People need to wake up and see the writing on the wall. The good news is we still have a legal system that includes the option of filing bankruptcy if necessary.

It is true, filing bankruptcy will stop foreclosure if needed. But what people need to realize is there are different chapters of bankruptcy filing. While all of them will stop foreclosure, one will only work temporarily as the creditors will exercise their right to file a relief of stay with the bankruptcy court. What it comes down to is filing Chapter 13 bankruptcy which is form fitted to the foreclosure problem. When filing chapter 13 an individual and their bankruptcy attorney will have to submit a feasible repayment plan to the bankruptcy court. Since debts are paid by priority, with secured debts getting priority payments and unsecured getting whatever's left over, the person will be able to negotiate something with their mortgage holder and keep their home as long as they can continue making the payment. Any debts like credit cards that are left unpaid at the end of the 3 to 5 year Chapter 13 plan, will be included in the bankruptcy discharge and wiped out. For people that are still employed and just got caught with their pants down by charging too much Chapter 13 bankruptcy has a lot to offer.

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