How the Bankruptcy Law Reform of 2005 Has Helped to Fuel the Subprime Foreclosure Rates

When lenders wanted tougher criteria for those filing Chapter 7 bankruptcy, in an effort to steer people towards Chapter 13 bankruptcy instead, they got their wish. However, that wish may now be helping to fuel the current subprime mortgage foreclosure rates. Since many of these debtors feel that they cannot afford to repay their current debts within 5 years anyway, as they would be required to under Chapter 13, they are instead deciding to stay current on their credit card debts to avoid bankruptcy and allowing their homes to go into foreclosure. This is backed by the fact that, according to Capital One Financial Corp., 70% of consumers who are at least 3 months late on their mortgage repayments are current on their credit card bills.

But losing your home does not have to be your only solution. Sitting down with a good bankruptcy lawyer will help you determine if you can qualify for Chapter 7 bankruptcy and, if not, the best plan to help you complete a Chapter 13 bankruptcy within the 3 to 5 years allowed. Allowing your home, the place where your family sleeps, to be taken away should be your absolute last option, after a bankruptcy lawyer has confirmed that neither a Chapter 7 or a Chapter 13 bankruptcy will work for you.

If you are considering bankruptcy, contact the offices of Allmand and Lee at (214) 265-0123 to discuss your options. They have helped other good people through bad times and they can do the same for you, too.