Before the American housing bubble burst at the end of 2007, creditors and lenders throughout the nation were doling out mortgages left and right, seemingly to anyone who asked. Many of these loans were given to under-qualified homebuyers and were made on the assumption that the housing market would continue to prosper and home equity would continue to rise. Unfortunately, this was not the case. In the wake of the subprime mortgage crisis and the housing market collapse, America experienced one of the worst economic climates in history. As a result, many homeowners found themselves and their homes underwater, meaning that they owed more than their homes were worth.
The financial struggles of many Americans were further compounded by a weak job market. In the years following the economic downturn, homeowners faced uncertainty, insurmountable debts, and foreclosures. For those who had borrowed against their property and taken out second mortgages or home equity lines of credit, the threat of losing their homes seemed all too real.
Although it appears as if our country has begun to right itself from an economic tailspin, there is still no doubt that the American economy and job market are still recovering sluggishly. It is no secret that foreclosures are still a regular occurrence throughout the nation. In fact, statistics report that in 2012 there were more than 5,000 foreclosures in Mecklenburg County. This equates to more foreclosures being filed every 10 days in 2012 than in the entire year of 2008.
While foreclosure statistics are certainly alarming, homeowners who face the prospect of foreclosure proceedings should know that you do have options available. Whether this comes in the form of bankruptcy or alternative resolutions will depend on a number of circumstances and your current financial situation. In any case, an experienced Charlotte bankruptcy attorney from our firm can help you determine the most appropriate plan of action you can take to manage your debt and protect your home.
One of the most unique and little-known provisions in the U.S. bankruptcy code is that filing bankruptcy can allow eligible homeowners to discharge their second mortgage. By completing the Chapter 13 bankruptcy process, consumers will be able to structure their debts into a more-manageable payment plan that typically last three to five years. At the end of the payment plan, the bankruptcy court may allow the remaining debt of a second mortgage to be discharged in the same manner as unsecured debts. This means that when homeowners successfully discharge their second mortgage, they will most likely only have to pay their original debt for pennies on the dollar. In addition, when second mortgages are eliminated, lenders are often more inclined to modify mortgages and prevent foreclosures.
The amount of debt relief available to people who need it is enormous. In order to successfully obtain a discharge of your debts, and to ensure that your second mortgage can be considered an unsecured and dischargeable debt, you need to work with an experienced legal team that can guide you through the Chapter 13 bankruptcy process. While our firm can help you determine if you are fully eligible to eliminate your debt through Chapter 13 bankruptcy, your home must be worth less than you owe in order to qualify. If you would like more information about the ways in which you can manage your debts, eliminate your second mortgage, and take control of your finances, contact a Charlotte bankruptcy attorney from Law Office of Jack G. Lezman, P.A. to schedule a free case evaluation.