Tragedy in the family, unemployment, divorce and increasing interest rates are a few of the many reasons people are unable to make their mortgage payments. This is resulting in extremely high foreclosure rates in the Portland Metro area. What can you do?

The question you need to think about is this: If you were current with all your mortgage payments today, can you still afford the regular monthly payments in the future without getting behind?

For some clients, if their house is no longer affordable, it might make sense to file a Chapter 7 Bankruptcy and give their house up. By doing this, it wipes out the mortgage deficiency as well as buys you a small amount of time (1-3 months) before you are forced to leave your home. If there is little equity to protect, a Chapter 7 might stop foreclosure and you might have a few months to have a realtor sell your home for you.

If you file a Chapter 13, it allows you to get caught up on your payments and it could possibly stop foreclosure and save your home. A Chapter 13 would be filed if you think preventing foreclosure is your best option. Then you would continue making monthly payments and the Chapter 13 would help you repay the deficiency. It might be possible to take away the second or third mortgage that is entirely unsecured. This happens when the value of your home is less than the primary mortgage balance. When you don’t have to pay the “unsecured” second and third mortgages, you might be able to afford the home.

When should a bankruptcy attorney be contacted? If foreclosure is in your future, you should call today. Contact The Suburban Law Group even if you are trying to refinance the debt with the help of a mortgage broker. You will have more time and options to prevent foreclosure if you act soon. You will also be able to reduce foreclosure expenses and decide whether or not you should file for bankruptcy.