As the Great Recession has continued to affect people and businesses in New Jersey and elsewhere, foreclosures are increasing in not only personal residences, but also for commercial property as well. Just like many home mortgage holders who increased their loans during the boom years for home improvements, businesses took on increased burdens to expand or pay for property renovations. Now, much like some homeowners, some companies are forced to consider the difficult choice of commercial bankruptcy to stop foreclosure.
Churches in particular are finding that it has become difficult to make mortgage payments, according to reports. Many of the loans taken out by congregations for expansion in the years prior to the recession are now coming due. Unfortunately, many of the members of the church are also suffering economic losses, and churches are finding that donations are down.
Banks, who until recently may have been hesitant to foreclose on a church, have now increased the actions, with 270 churches being sold after default since 2010. Of that number, 90 percent were foreclosure sales. That is up from only 28 such sales in 2008.
Like other organizations, some churches are turning to commercial bankruptcy to stop foreclosure action. This is a difficult choice for many congregations, but one they often must consider to save their beloved spiritual home. The highest percentages of sold churches are in states that were hit hard during the economic crisis.
As churches and other businesses consider commercial bankruptcy, they must gather all of the organization’s assets and debts. The review of this evidence will help to establish what, if any, remedies may help the organization. There is no shame in accepting that circumstances beyond one’s control have contributed to a situation that needs to be remedied. Bankruptcy often offers the opportunity to do just that, while laying the foundation for a return to firm financial footing.
Source: Reuters, “Church Foreclosures Surge,” Tim Reid, March 11, 2012