These days, more and more people are finding themselves in financial distress. High unemployment, adjusted rate mortgage increases and other factors have made it difficult for many to pay their regular expenses, including their mortgage. Unfortunately, many homeowners do not know where to turn for help and end up losing their homes in foreclosure.
According to news sources, 2.8 million properties were foreclosed upon in the United States last year. However, experts believe this number would have reached more than three million if a documentation issue had not postponed some foreclosures.
RealtyTrac reports indicate that Michigan had the seventh highest foreclosure rate in the country last year. The state had one foreclosure for every 33 households, while the national rate was one for every 45 households. Nevada, Arizona and Florida topped the list for most foreclosures nationwide in 2010.
As long as Michigan's unemployment rate remains high, financial strain will likely continue to be a problem for many families. In November of last year, the unemployment rate was 12.4 percent. However, there is help for struggling homeowners.
Filing Chapter 13 bankruptcy is one of the most effective ways to prevent foreclosure, even when a foreclosure sale has already been scheduled. When someone files Chapter 13 bankruptcy, the federal bankruptcy court issues an order that prevents the mortgage company from moving forward with the foreclosure, allowing homeowners and their families to remain in their homes.
This type of bankruptcy allows a debtor to cure any arrearage and repay a portion of his or her unsecured debt over a specified period of time. By freeing up some of the debtor's available money, he or she will be in a better position to pay the monthly mortgage bill.
Source: Detroit Free Press, "Michigan 7th in nation for 2010 foreclosures," Greta Guest, 12 Jan. 2011