Choosing Bankruptcy to Avoid Foreclosure
Even though you cannot get rid of your mortgage payments through bankruptcy, about one in five people who went through mandatory pre-bankruptcy credit counseling said they were doing so to avoid losing their homes to foreclosure, according to Consumer Credit Counseling Services of Greater Atlanta. That organization provides counseling throughout the United States.
From April through June, they counseled 50,385 people who planned to file. Each month, just over 20 percent said they were seeking bankruptcy protection to avoid foreclosure. According to the American Bankruptcy Institute, filing a bankruptcy petition creates an automatic stay against debt-collection efforts, which stops foreclosures -- if only temporarily. If the owner doesn't continue to make payments, the foreclosure process can resume.
But relief from other debts could create enough room in the budget for a strapped homeowner to make mortgage payments. That's something borrowers can ask about when they go through the mandatory pre-bankruptcy counseling with an organization like CCCS.
August 6, 2009; 6:00 AM ET
Categories: Foreclosure , Loan modifications , Mortgages , Statistics , The economy , The market
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Posted by: brianvlee | August 6, 2009 10:21 AM | Report abuse
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