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Bankruptcy: New Jersey homeowners can stop foreclosure

While foreclosure rates are below what they were a year ago and have gone up just a bit from February to March, foreclosure is still a looming concern for many New Jersey homeowners. In March, there were 69,000 homes foreclosed upon in the United States -- 3,000 more than in February. And even still, there are plenty of homeowners who are behind on their mortgage payments and on the edge of foreclosure. Homeowners in trouble on the mortgages do, though, have the opportunity to stop foreclosure.

It can be a very complicated process, searching for ways to fight back when foreclosure is on the edge of the horizon for a homeowner. While there are some government programs that are helpful for many homeowners, not all homeowners qualify for the government programs. This leaves many in a rut with seemingly no way to get out.

However, there is another option. While homeowners don't always consider it first, bankruptcy can help stop foreclosure. In some instances, filing for bankruptcy may help free up some money by eliminating debts to actually allow the mortgage payment to become more manageable. Bankruptcy reorganization under Chapter 13 may help prevent additional default interest from accumulating while creating a new repayment plan that is more suitable for the homeowner's current financial situation.

There are two types of personal bankruptcy options: Chapter 7 and Chapter 13. An individual or family in debt and on the brink of losing their home to foreclosure may benefit by exploring all debt relief options available to them. Filing for bankruptcy can stop foreclosure and allow some homeowners to keep their home, stop harassing phone calls from creditors, and set the foundation for a more improved financial future.

Source: MortgageLoan.com, "Foreclosures Pick Up Slightly," Kara Johnson, May 2, 2012

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