Homeowners struggle with foreclosures

De Soto County residents are feeling the strain of the economic crisis in a number of ways. One significant issue that is affecting residents across Mississippi is the trending of foreclosures. Many residents facing foreclosure and other related financial hardships may feel overwhelmed. It's important to remember that although recent trends are improving, foreclosure and other financial problems are a reality to many Mississippi families.

Latest foreclosure trends

According to RealtyTrac's September 2012 U.S. Foreclosure Market Report, the number of foreclosure filings has decreased by 16 percent since last September. But, many states could see a fluctuation in foreclosure numbers due to recent court decisions and legislation dealing with the rules of foreclosure. It may take a while for the rules to be fully complied with and the lag may slow the process. Over the last year, the average foreclosure took up to 382 days to complete, the highest number since 2007. The time it took to complete a foreclosure significantly increased from the previous year.

Mississippi is both a non-judicial and a judicial foreclosure state (judicial foreclosures that are processed through the courts), but judicial foreclosures are the most common. In states where judicial foreclosures are primarily used, 14 of the 26 states experienced an increase in foreclosures over the last year.

How bankruptcy can help the many struggling homeowners

One way to stop a foreclosure is to file for bankruptcy. However, bankruptcy may not be the best option for a homeowner who struggled to make consistent mortgage payments before the bankruptcy proceeding. If the filer made consistent payments before and currently has an income coming in, then bankruptcy could be a solution to address their foreclosure.

In a judicial foreclosure, the court needs to grant lenders permission to foreclose on the property. By filing for bankruptcy before a foreclosure, the court could stay the foreclosure process. While both Chapter 7 and Chapter 13 bankruptcy offer the automatic stay, a Chapter 13 bankruptcy may be the best option if a homeowner wants to retain the house.

By filing a Chapter 13 bankruptcy, the court will allow the homeowner to organize his or her finances and set up a monthly payment plan to pay off debts within a three-to-five year period.. The filer will base his or her payment plan and budget off of their income. Another advantage is that the bankruptcy trustee will use the filer's payment to pay secured debt first, which includes a mortgage. The filer will pay off the mortgage before he or she will pay unsecured debt. This may save the property from a foreclosure. There is also a possibility that the court may eliminate any additional mortgages on the property through discharge.

If you have questions about filing for bankruptcy in Mississippi or options dealing with debt or foreclosure, contact an experienced bankruptcy attorney to explore your legal options.