Bankruptcies are one of the methods used by troubled homeowners to avoid or delay foreclosures. A Chapter 7 bankruptcy does not stop foreclosure. It only provides temporary relief to troubled homeowners from unsecured creditors. But some distressed homeowners who want to avoid going through the complex and time-consuming foreclosure process favors bankruptcy.
In Chicago, Illinois, several struggling homeowners who are facing foreclosures or bankruptcies have staged a protest in front of the office of Todd Stroger, president of Cook County Board, to demand for money to support programs that will help alleviate the problem of foreclosures.
The protest was also attended by almost 40 members of the Action Now. According to members of the Action Now, there was no county budget allocation for foreclosure court mediation and counseling. Participants said that distressed homeowners need court mediation because they do not know who to turn to for help in saving their properties from foreclosures.
According to a market study, as many as 86 percent of people who lost their properties to foreclosures in 2008 do not have legal representation. Industry experts said that there is a great need for legal counsel. They said that many distressed homeowners do not have knowledge on how to present a legal claim or file a bankruptcy.
Meanwhile, experts predict that about 53,000 homeowners will receive foreclosure filings in Chicago before the end of this year. However, they said that many of these foreclosures could be prevented if only homeowners could have easy access to legal services. They urged Stroger to use a portion of the total repossession filing fees to financially support preventive measures.
On the other hand, an Action Now member said that majority of troubled homeowners could have saved their properties if they could have access to court mediation. Legal advice is also needed by homeowners who plan to file for Chapter 13 bankruptcy. This type of bankruptcy would allow borrowers to meet with their creditors and discuss a payment arrangement or plan that will allow them to pay back their debt.
Industry experts said that no matter what distressed homeowners decided for themselves, whether to fight foreclosures or go for bankruptcies, they need legal representation to get them through the whole complex process.
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