The housing market may take even longer than expected to recover in the wake of Hurricane Sandy. While foreclosure filings across the United States were down 19 percent in October from the same period last year, October saw an increase from September in both foreclosure starts and overall foreclosure filings, according to data from RealtyTrac, a market research company. New York, New Jersey and Connecticut saw the biggest increases in foreclosure filings for the month of October.
The New York area already has one of longest foreclosure processes in the nation, with foreclosures taking longer on average to complete than other areas of the nation. This likely will get worse as a result of moratoriums on foreclosures that have been put into place following Hurricane Sandy. One option for New York-area homeowners who face long foreclosure processes may be filing for Chapter 13 bankruptcy.
Chapter 13 bankruptcy allows homeowners avoid foreclosure on their homes and obtain a fresh financial start. Under Chapter 13, the homeowner establishes a court-supervised repayment plan that provides for monthly payments to creditors over a period of three to five years, depending on the homeowner’s monthly income. The Chapter 13 repayment plan allows the homeowner to stop foreclosure proceedings and maintain possession of the home as long as he or she makes timely monthly payments. Chapter 13 also gives the homeowner an opportunity to obtain lower interest rates and possibly eliminate a second mortgage or judgment lien on the home.
A homeowner who is facing foreclosure should seek counsel from an experienced bankruptcy attorney. The attorney can help assess whether Chapter 13 is a viable option and can also help protect the homeowner’s rights by ensuring the bank follows the proper foreclosure procedures.
Source: NASDAQ.com, “U.S. Foreclosure Filings Drop 19% in October,” Melodie Warner, Nov. 15, 2012by