During the COVID-19 pandemic, many commentators expected the rate of home foreclosures to increase across the country. However, moratoriums and economic aid largely prevented a significant rise in foreclosure rates, and many homeowners were able to remain in their homes despite facing job losses and furloughs. Yet according to a recent article in MarketWatch, that increase in home foreclosures appears to have begun. Indeed, the article reports that foreclosure filings have increased by more than 150% from July 2021, and since the start of 2022, foreclosure filings have risen by about 219%.
What are the likely implications of the rise in foreclosures, and what options might you have to avoid foreclosure?
Details of the Recent Foreclosure Surge
According to the article, about 96% of the largest metro areas in the U.S. have seen a rise in foreclosure filings and starts, and Illinois is near the very top of the list. When it comes to the overall rise in foreclosure rates, Illinois has the highest increase, and the state has the fourth-highest rise in foreclosure starts.
What does the increase mean for struggling homeowners? As the article points out, the rise brings the overall number of foreclosures back to a figure that is closer to pre-pandemic levels, suggesting that foreclosures were markedly low over the last two years. At the same time, the dramatic increase in foreclosure rates suggests that many homeowners are struggling to pay their mortgages and that it is important for those struggling homeowners to learn about options to prevent foreclosure.
Options to Consider to Avoid Foreclosure
If you are facing foreclosure and you want to take steps to stop the foreclosure process, you should get in touch with an experienced Oak Park foreclosure defense attorney who can discuss options with you.
In general, if you want to be able to keep your home and you qualify for Chapter 13 bankruptcy, our firm can tell you more about how a reorganization bankruptcy can halt foreclosure and can allow the debtor to keep their home. For this option to be available, you will need to be able to show that you are a wage earner capable of making regular installment payments as part of a repayment plan. There is a debt limit in Chapter 13 bankruptcy cases, but even if your debts exceed the limits (unsecured debt of $465,275 and secured debt of $1,395,875 until May 2025), you could be eligible for Chapter 11 bankruptcy instead.
For debtors who want to avoid the credit hit associated with a foreclosure, there are a couple of options you can consider. First, you might be able to get the bank to agree to a short sale. With a short sale, you can sell the house for an amount less than what you owe, and the bank may forgive any remaining debt. Or, you might consider a deed in lieu of foreclosure, which involves signing over your house to the bank in exchange for the bank agreeing to stop the foreclosure process. A lawyer can explain the differences between a short sale and a deed in lieu, as well as the benefits and limitations of each of these options.
Contact an Experienced Oak Park Foreclosure Defense Lawyer
If you have questions about avoiding foreclosure or need help with your case, one of our experienced Oak Park foreclosure defense attorneys can speak with you today about your options. Contact the Emerson Law Firm for more information about how we can help.
See Related Blog Posts:
Top Five Advantages of a Short Sale
Does Bankruptcy Always Stop Foreclosure?