The U.S. housing bubble is comprised of areas including California, Michigan, Illinois, Florida, Arizona, Nevada, Colorado, Oregon, Idaho, Utah, Ohio, Tennessee, Arkansas, Indiana, Maryland, Virginia, Georgia, Rhode Island, New Jersey, Hawaii, and Massachusetts. The explosion of the housing bubble caused such a financial disaster that the U.S. Secretary of the Treasury called it “the most significant risk to our economy.”
The consequences of the bubble resulted in more than 900,000 foreclosures last year when the steep decline in home prices left those homeowners unable to make their mortgage payments. The slippery slope many times lead to foreclosure and, finally, bankruptcy.
Bankruptcy and Foreclosure
Did you know that foreclosure can be staved off with the appropriately timed bankruptcy filing? It’s true. Filing bankruptcy triggers an “automatic stay” which means that your creditors are no longer legally allowed to further collection activities against you. This includes foreclosure.
There are a few notable exceptions to this rule, including that you cannot prevent foreclosure if you were notified by your lender of foreclosure proceedings prior to filing bankruptcy. The lender will take up that matter with the court and request a motion to proceed with the foreclosure regardless of the bankruptcy.
Know the Facts About Bankruptcy and Avoid Foreclosure
A good portion of the 900,000 foreclosed upon homes last year could’ve been avoided if more homeowners knew the facts about bankruptcy and foreclosures. By filing bankruptcy before you get in too deep with your lender, you are assuring that your home stays yours throughout the bankruptcy process. Not only that but it could remain yours at the conclusion of bankruptcy if you and your licensed bankruptcy attorney go through all the right holes with your bankruptcy case.
