New Jersey personal bankruptcy can slow foreclosure process

Many people in New Jersey and elsewhere took on home mortgage loans over the past few years that were unfavorable. Some of these same people found that they had difficulty making the required payments on their mortgage because of the high rates or the lowered value of their homes. This has led to many facing foreclosure or making the decision to seek the help offered by a personal bankruptcy filing.

When a person in New Jersey files for a personal bankruptcy, they are able to forestall a foreclosure action. This means that they have time to negotiate their home loans with their lender. In some cases, this can lead to a successful modification of a loan or a short sale. Others use the time to find new living arrangements.

However, not all who try to work with their lenders are successful. This fact led to the federal settlement agreement between the nations largest banks and officials from 49 states. The agreement made requirements for the bank mortgage holders as to how they would work with customers who found it difficult to repay their mortgages.

Now, one report notes that not all of the banks are complying with the new rules. This has led to challenges for homeowners in New Jersey and elsewhere. To alleviate this problem, new guidelines are being presented to the banks. In addition, people are being advised to seek information about their available options. This effort can pay off when people are able to keep their homes or modify loans, often during the personal bankruptcy process.

Source: New York Post, Banks failing at foreclosure services: report, Catherine Curan, Dec. 8, 2013

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