Homeowners Choose Bankruptcy to Avoid Foreclosure
Posted on Aug 6, 2009 12:26pm PDT
In Atlanta, it is reported that many homeowners are choosing to file for bankruptcy in order to avoid foreclosure. It has been revealed that a surprising amount of homeowners are choosing bankruptcy to avoid making further mortgage payments, which they can no longer afford due to the tough economy. In fact, Consumer Credit Counseling Services of Atlanta says that 1 out of 5 people who filed for bankruptcy each month told staff during their pre-bankruptcy counseling that they were filing to avoid foreclosure.
The Consumer Credit Counseling Services of Atlanta provides credit counseling for people who are on the verge of filing for bankruptcy in Georgia. From April to June, the organization claims that it counseled over 50,385 pre-bankruptcy filers. The organization says that 20% of people who file for bankruptcy each month are doing so to protect themselves from losing their homes to the banks and other financial insitutions.
When people file for bankruptcy, their petitions create an automatic stay on their homes, which stops collection efforts from occurring temporarily. After this time, homeowners must continue to pay their mortgages, or the foreclosure process will resume.
The CCCS of Atlanta encourages individuals to seek appropriate credit counseling anytime they wish to file for bankruptcy or are on the brink of foreclosure. By seeking counseling, people will recieve the information they need to protect their homes and to make effective decisions.
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