• Lisa Simpson
• Dec 20,2010
• In: Foreclosure

Once Foreclosure Threatens it is Prudent to Discuss with a Bankruptcy Lawyer

It has been the worst recession since the time of the Great Depression. People who would never have dreamt of it are now being pushed towards bankruptcy and asking themselves if they should file one without delay.

It is fear that is making many hesitate as they are concerned about finances having ruined their lives. But Tara Twomey, a lawyer with National Consumer Law Center gives the assurance that this not the case. Although there is a stigma attached to bankruptcy as it can remain on the credit report for as long as ten years. Despite this she said that those who are drowning in debt can start afresh and push forth without losing the assets that are of importance to them.

The housing crisis following the recession has left the lenders also very cautious. Many people who are keen to bring back order to their lives are failing to get loans after coming out of bankruptcy; it is the same story with credit cards. Exorbitant interests are charged for those with a history of bankruptcy.

Experts dealing with bankruptcy do not deny this but they stress that other options are there. New payment arrangements can be worked out with the lenders. Whatever it may be – one should not delay filing for bankruptcy protection.

There are 15 million unemployed and a quarter of the house owners have gone underwater with the value of their properties being less than the loan due amount. People have learnt the bitter way that imposing charges today on the belief that it will be possible for them to pay tomorrow is nothing but a risky trap.

After Congress made tight the rules of bankruptcy in 2005 there was a lull but lately personal bankruptcy numbers are increasing. As per government data 1.5 million have filed for it during the 12 month stretch that ended at the close of the third quarter. It was a spike of 14% from the previous 12 month period that ended with the close of the third quarter in 2009.

Thus the figures show that the condition of the people has worsened said Robert Lawless of University of Illinois. The suffering is aggravated because a good number of people wait for too long before filing for bankruptcy; they need not suffer to this extent, he opined. Lawless added that once foreclosure threatens it is prudent to discuss with a bankruptcy lawyer. Timing is an important factor.

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