A lot of attention has been made in the media about the economic recovery. The media has made it appear as if people’s financial problems have been fading and things are getting back to the way they were before the economic collapse in 2008. However, for many New York residents this hasn’t been the case.
In fact, people across the country are still struggling financially. People’s wages have not increased, the price of consumer goods is on the rise and many people are still stuck with homes that are seriously underwater. One report claims that 9.1 million people across the U.S. owe at least 25 percent more on their mortgages than their house is currently worth. These factors combined often make it difficult for people to make ends meet and pay for all their obligations. Additionally, banks and mortgage institutions have been reluctant to accept loan modifications even for those who are struggling.
New Yorkers who find themselves struggling to make their mortgage payments can face foreclosure. They may also be facing harassing calls from creditors and other financial issues. People may be unsure where to turn in order to meet their obligations and stay in their family home.
In some cases, personal bankruptcy can be the right solution. Personal bankruptcy can stop foreclosure proceedings while giving people the debt relief they need to meet all their obligations. In either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, the automatic stay that goes into effect at the beginning of the proceedings will stop the foreclosure. This can give people the time they need to negotiate better terms with the bank.
People who are struggling with high mortgage payments, credit card debt, medical expenses and more should make sure they understand their legal options. Personal bankruptcy could be one way to get some much needed debt relief during these uncertain times.
Source: The Huffington Post, “Bankruptcy: The Foreclosure Kill Switch,” Jorge Newbery, April 22, 2014