During the recent fall of the US mortgage industry, many home owners found themselves threatened with losing their homes. After falling prey to predatory lenders who avoided proper lending practices while adding small print that allowed for adjustable mortgage rates, many found themselves trapped and went from paying a $1,200/mth mortgage to $2.400 over a 3-4 year period – THAT’S DOUBLE THE AMOUNT THEY ORIGINALLY ANTICIPATED PAYING! Needless to say, the homeowner falls behind, and after several months of not being able to keep up the payments, the bank puts their home in foreclosure.
Many have found that signing up for a credit counseling course before filing for bankruptcy very helpful. Others find that filing for bankruptcy a very viable solution. As soon as you file for bankruptcy, the court issues and “Order of Relief” or an “Automatic Stay”, which instructs creditors to cease collection activities and postpones foreclosure sales.
There are some time sensitive documents and procedures, so if you’ve received a notice of default from your lender and are considering filing for bankruptcy, you should act immediately.