As the recession slowly comes to an end, many in New Jersey have found that they still owe more on their home mortgages than what the house is worth. In some areas, this is because of overbuilding, a recent report asserts. For others it may be due to unfavorable mortgage terms. However, some homeowners in these situations are seeking an alternative to these terms, including a personal bankruptcy.
In a personal bankruptcy in New Jersey, homeowners can forestall a foreclosure action in most cases. This effort gives people time to renegotiate loans or terms of their mortgages. This effort can also allow people to decide of they need to make other living arrangements due to their inability to pay their home mortgage.
In addition to a home, many find that they are able to retain much of their property during a personal bankruptcy using our state’s exemptions. These allow for a limited amount of assets to be protected from a Trustee whose job it is to sell as much as possible to repay debts. This is especially the case for some types of personal bankruptcy such as a Chapter 7.
Filing for a personal bankruptcy can lead many in New jersey to have questions abut the benefits of the process. To make a good decision about the filing, it is often helpful to review a financial situation with an experienced professional who is familiar with the process. This effort can pay off when a foreclosure is avoided or assets are retained and debts are discharged.
Source: Huffington Post, Is Foreclosure Ever a Good Idea?, No author, Oct. 25, 2013