• 23
  • December
    2011

The economy may not officially be in recession. But with unemployment hovering around 9 percent, affording mortgage payments remains a huge challenge for millions of people in Florida and around the country.

Many of these people are facing the possibility of losing their homes to the foreclosure process in 2012. Indeed, you may be one of those people.

If so, you may be asking yourself what role bankruptcy could play in helping you deal with your debts while keeping a roof over your head.

Filing for bankruptcy may not solve all of your debt relief problems, but it does give you more options. For one thing, it could force the company that owns or services your mortgage to actually negotiate with you about a modification of the terms of the loan.

According to a recent report in Forbes, big banks have massive amounts of housing loans on their books that they are taking into foreclosure. The numbers are breathtakingly large. Bank of America alone has $23 billion in residential loans in foreclosure. That number rises to a staggering $90.6 when loans serviced for other companies are added in.

It's true that, depending on a debtor's circumstances, bankruptcy may not be the only option. For example, the Home Affordable Refinance Program could offer a chance to refinance your entire balance at a lower interest rate.

HARP only applies, however, to mortgages held by Fannie Mae and Freddie Mac. And even if your mortgage is with Fannie or Freddie, you will have had to be current on your payments for the past six months.

In short, bankruptcy may be a reasonable response when facing foreclosure. Talk over your options with a Florida debt relief attorney at our firm.

Source: "Going Bankrupt in 2012, but Keeping Your Home," Forbes, 12-8-11