Bankruptcy Unable to Stop Forclosures Houses in Nashville
Bankruptcy protection has not helped stop the process that turned some homes into forclosures houses in Nashville in June.
In many cases, homeowners file for bankruptcy after receiving foreclosure notices in an effort to prevent foreclosure, but in these Nashville cases, the homeowners filed for bankruptcy several months before they received foreclosure notices.
They filed for Chapter 7 bankruptcy before they would miss monthly loan payments to prevent foreclosure. But still, after going through the severities of the bankruptcy procedure just to save their homes, these homes became forclosures houses.
The case of an unmarried receptionist who has an unpaid loan of $147,000 is an example. This woman, who was previously earning $2,040 monthly, filed for bankruptcy in 2008. Her bankruptcy filing was approved, but she still owed the bank a monthly payment of $1,066 on her two mortgage loans totaling $147,000. This month, she was given a foreclosure notice. Certainly, without additional income, her home will soon get added to lists of forclosures houses.
The case of a Nashville couple is another example. They filed for Chapter 7 bankruptcy protection to save them from their credit card debts. They were able to wipe out the $54,000 they owed on 10 credit cards, but they still had to pay their mortgage loan which has reached $108,000 while the home fell in value to only $83,000. The couple also received their foreclosure notice this month. If they are unable to remedy their missed monthly payments, it would not be too long before their house gets added to inventories of foreclosures houses.
The third case illustrates the situations of families downed by high levels of credit card debts. Based on a survey carried out recently by the nonprofit National Foundation for Credit Counseling, 6 percent of Americans bear credit card debts totaling $10,000 or higher.
This family of four accumulated a staggering credit card debt of $72,000 largely due to medical costs. They also needed to pay an anesthesiology clinic for a certain procedure. Unable to bear the financial burden, they filed for Chapter 7 bankruptcy.
Now, they live in a rented apartment because their previous home has already been added to forclosures houses.
These are just three examples of bankruptcy cases that bear out the finding last year that more than 50 percent of homeowners who obtained loan modifications defaulted again within 6 months, ultimately seeing their homes added to listings of forclosures houses.
