Facing Foreclosure? Bankruptcy May Help
Although the economy may be showing signs of possible improvement, the New Jersey housing market is still suffering. According to recent statistics, New Jerseys residential foreclosure rate increased nearly 30 percent in 2009, compared to the national average of 21 percent. Unfortunately, no one expects the foreclosure rate to drop any time soon. Homeowners who find themselves struggling to make mortgage payments do have options, however, and filing for bankruptcy may allow them to preserve some of their assets including their homes and get out of debt.
Mortgage Modifications Are Not Working As They Should
The banks are not stepping up and making a high enough percentage of mortgage modifications permanent. Our firm represents many individuals on loan modifications and it is becoming increasingly difficult to successfully obtain favorable and permanent loan modifciations. The banks are giving these trial modifications, but then not making the loan modification permanent.
Many of our clients are working on them on their own and also having great difficulty.
Supposedly to try to stop the foreclosure problems, the Obama administration created the Home Affordable Modification Program (HAMP) last February.
What impact has HAMP made on the foreclosure problem?
Foreclosure and Bankruptcy Filings Increase Year over Year
RealtyTrac reported its January 2010 Foreclosure Market report on February 11, 2010, which showed a decrease of nearly 10 percent from the previous month of December 2009. However, the report highlighted that there was a 15 percent increase above the level of foreclosures reported in January 2009. The year over year increase is a more accurate predictor of the foreclosure market. The report also shows one in every 409 United States housing units received a foreclosure filing in January.
Where did New Jersey rank for foreclosure rates?
Bankruptcy Rule Changes to Protect Debtors Against Unauthorized Charges
The Bankruptcy Rules Advisory Committee is considering important rule changes to the Bankruptcy Rules.
Many creditors abuse the bankruptcy proof of claim filing process and file proofs of claims with added and unauthorized charges without adequate back up. This causes debtors to have to pay more in a bankruptcy case.
Learn what the new bankruptcy rules would require
The Credit Card Accountability Responsibility and Disclosure Act Will Lead to More Bankruptcy Cases
The new credit card act does not protect consumers as intended. The Credit Card Accountability, Responsibility and Disclosure Act, known as the CARD Act, are supposed to help and protect consumers from credit card companies taking advantage of people. Despite the changes in the credit card laws, the banks and credit card companies have found ways to charge more than ever. Our views remain that this will do nothing to help the consumer and will only make the banks more money. As a result of the continued abuse by the credit card issuers, debt problems and the increase bankruptcy filings will continue.
Learn how credit card companies are getting around these new laws
Assignment for the Benefit of Creditors - (ABC) viewed as an Effective and less costly Alternative to Bankruptcy for the Liquidation of a Business.
It was reported on February 12, 2007 in the National Post (Canada) by Columbia Professor Edward Morrison, that using state insolvency systems is faster and less expensive in most cases. Professor Morrison said, "It's a much less public event than a federal bankruptcy filing, and thought to be very quick and relatively cheap."
In a study of failed Dot Com Companies, Professor Ronald J. Mann argued that "states can improve the efficacy with which the assets of failed firms are redirected to profitable uses by adopting procedures that are more hospitable to ABCs.
Learn why ABCs are an effective and less costly alternative to bankruptcy
Bankruptcy May Be the Best Option in Troubled Times
2009 is the third consecutive year that bankruptcy filings rose across the country. More than 1.3 million people filed for bankruptcy during the 2009 fiscal year, marking a 35 percent increase in filings from 2008. While the majority of these filings were individuals seeking protection under the bankruptcy code, business filings also increased by 63 percent since last year.
Even as national commentators declare the worst of the economic downturn over, the number of bankruptcy filings will likely continue to rise: the national unemployment rate recently topped 10 percent for the first time since 1983 and another batch of adjustable rate mortgages are scheduled to reset in 2010.
People often view bankruptcy negatively, believing it to be a black mark on their record or a sign of financial irresponsibility. Far from a black mark, bankruptcy offers the opportunity to both get out of debt and start fresh.
Learn how filing for bankruptcy can help you get out of debt