In the aftermath of the 2008 mortgage crisis, many homeowners in Kansas and Missouri faced loss of equity and foreclosure. This real estate bubble bursting served as a reminder that the economy and real estate are unpredictable. It is certain that economic disasters will happen in the future, and homeowners will once again be affected.
According to the Mortgage Bankers Association, more than 900,000 homes were in foreclosure in 2008. When people become unemployed, paying monthly mortgage payments can become very difficult. Unsurprisingly, the Department of Labor reported 2.8 million jobs were lost in 2008. Although the economy is improving, many people are still struggling years later to get their mortgage payments and budgets in order. People are going back to work, but many are underemployed and may not have the same earning power they once had.
Homeowners will find it difficult to pay off credit cards, car loans, and mortgage payments without with reduced incomes. Fortunately, solutions exist that can help homeowners eliminate other debts so it can be easier to pay off a mortgage.
Can Filing for Chapter 7 Bankruptcy Help Me Keep My House?
Filing for Chapter 7 bankruptcy can give homeowners the option to “reaffirm” secured debts, such as a mortgage. Reaffirmations with creditors will allow borrowers to discharge unsecured debts while keeping secured debts such as a mortgage.
For example, a reaffirmation would allow a borrower to set aside money that would have gone to a Visa or Mastercard payment (unsecured debt) to go to a mortgage payment (secured debt). During the process of a reaffirmation, the creditor will not foreclose as long as payments continue.
The Sader Law Firm – Kansas City Bankruptcy Attorneys