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Debt Destroy

Don't Rush Into Bankruptcy Without Knowing Your Options

 Janna's Blog - Posted: 11/20/2007
The sub-prime mortgage crisis and the ensuing interest hikes and foreclosures have left scores of people facing bankruptcy. Even home builders are feeling the squeeze: in early November, three of the nation’s four largest home builders received downgraded credit ratings of “non-investment” or “junk” grade. Ouch. But that’s not too surprising, with the deluge of new homes sitting unfinished and unpaid for, or getting auctioned off for bottom dollar.

Still, sympathy generally lies with the families who got suckered into the American Dream of owning a home, whether or not they could ultimately afford it. Many of these families have considered bankruptcy in order to stave off foreclosure, but such a move would probably just delay the inevitable. Homes are only safe from foreclosure if a homestead exemption prevents the lender from selling the property. Another tactic is to file for Chapter 13 bankruptcy, which provides a repayment plan (typically 3-4 years in length) that continues regular monthly payments and brings past due payments up to date during the same period. Refinancing might also be an option, with arrearages rolled into a new loan. A quick meeting with a financial planner or attorney can't hurt, and will almost definitely give you valuable information.

Anyone considering bankruptcy should be aware of the scams that have proliferated since the housing crisis began. It’s not recommended to transfer all or part of your title to a third party for any reason. Courts have caught on to this trick. Homeowners who fall for such scams usually end up paying large sums of money to the scammer, but lose their home anyway. If your home is in danger of foreclosure, check out some of the legitimate alternatives before you do anything drastic.


- Thanks for sharing your blog.
jdmanuel - nice share, very informative!
rakesh284 - Great suggestion.I think you are right.One should never rush to do something.That person should check out different option which are available to him
oxygen02 - Great post!
oxygen02 - You have great article.