Eliminating Foreclosure Debts
In Sterling Heights, the foreclosure rate is down from record highs following the national financial crisis. In 2010, 874 local families had their homes foreclosed on. The foreclosure rate has now dropped by as much as 80 percent, and only 174 foreclosures occurred in 2014. The Advisor & Source indicates that this brings the number of foreclosures closer to the normal baseline of around 100 homes lost every year.
Although there are fewer homes being foreclosed on, Sterling Heights ranks 13th out of 24 comparable municipalities in the rate of homes being seized by lenders for nonpayment. The decline in the foreclosure rate, coupled with improving unemployment statistics, has the City Manager of other local officials excited about “encouraging economic statistics.”
For the families who lost their home to foreclosure, however, economic recovery may seem like an impossible dream. Not only does the foreclosure damage a debtor’s credit and result in the loss of a home, but it can also have other far reaching financial consequences. The biggest problem for many homeowners is that the foreclosure does not always eliminate the mortgage debts they owe. This can leave a person with no home, but still facing the bills associated with a mortgage that was past due.
If your home sells for less than the total amount that was owed on it, the mortgage lender can come after you for the difference. Lenders can pursue judgments against you and even take steps like garnishing the wages you earn.
Fortunately, there is a solution to this. Sterling Heights bankruptcy attorney can help you to file bankruptcy so you can put a permanent end to your obligations to the mortgage lender.
How a Bankruptcy Lawyer Can Help After Sterling Heights Foreclosure
The impact of bankruptcy on unpaid mortgage debt is going to vary depending upon the type of bankruptcy you file, as well as the type of mortgage debt that is due. If you file a Chapter 7 bankruptcy, most foreclosure debts will be discharged. This includes debt accrued due to the difference between your mortgage and what your house sold for in foreclosure. First and second mortgage debts, as well as lines of credit, can all be wiped out in a Chapter 7 bankruptcy after the foreclosure or if you walk away from the home. Not only will your debt from a foreclosure be forgive but all other eligible debt (including but not limited to: credit card debt, medical bills, repossessions, etc.) will be discharged as well.
If you file a Chapter 13 bankruptcy, the difference between the home loan and proceeds generated from the foreclosure sale, as well as other eligible mortgage debts, can become part of your repayment agreement. Payments are based on income, and after completing a three-to-five year repayment process, remaining balances will be discharged. Chapter 13 is not the favorable Chapter to file between the two.
You should not have to be stuck paying bills for months or even years after your house is foreclosed on. Contact Jeffrey Randa, a bankruptcy attorney for Sterling Heights, to learn how he can help you to solve the debt problem for good.