Minnesota Foreclosure Rates Rise

Foreclosures in Minnesota have accelerated in recent months. This is probably due in part to the settlement the banks made with Minnesota and other states in regards to the robo signing scandal. In some ways this could be positive because it will remove foreclosed homes from the inventory of available homes, leaving only traditional sales. It may create an environment where prices will be able to rise on homes. This of course does not help the homeowner who is about to lose their home to foreclosure. If you have questions about foreclosures in Minnesota give our office a call at 952-294-0144.

Housing Index shows improving Prices in the Twin Cities

A leading housing index shows that housing prices were up 3.3% in the Twin Cities. This is good news for my clients who are typically underwater in their houses. Hopefully the market can maintain this momentum to make buying a house a good choice again. The issue I see with my bankruptcy clients is they will need many months if not years of price gains to make up for the drop in their homes value.

House Underwater!

According to a recent report 30% of homeowners are underwater on their home. Essentially an underwater home is worth less than what is owing to a the bank. If you are one of these homeowners, a number of considerations should be taken on how to proceed. First, are you current on your mortgage? If current, you should be thinking that you need a place to live and in a lot of cases a mortgage payment including the principal, interest, taxes and insurance is less than comparable rent. Second, how far underwater is your house? If you home is $40,000 or more underwater you should run a calculator to see how many years it will take to bring your house above water considering payments and inflation of home prices. Third, can you afford the home even if a disaster strikes? If a family member suffers a job loss or health problem can you remain current on the home? If the answer is yes, stay in the house. If the answer is no, either you need greater savings or consider if the house if affordable considering the above factors.
If ultimately you decide you cannot afford the house, generally in Minnesota only a 2nd mortgage can pursue you and seek judgment. A bankruptcy can discharge any 2nd mortgage judgment.

How Do Clients Pay Their Bankruptcy Filing Fees?

This is one of the most common questions that I get asked when talking to clients about filing for bankruptcy protection. I have had a lot of clients say that if they had the money for the bankruptcy, they would not need to file for bankruptcy. This is not true since in most cases these clients have a debt load that they could not pay off in twenty years. The other problem is if you do not file for bankruptcy protection and just use tax refunds and 401k loans to pay back creditors you jeopardize your retirement savings and emergency savings, without making any dent in your debt. This approach just kicks the can down the road, and you will be in the same issue in the next 6 months with creditors breathing down your neck.
Our clients use several methods to pay our fee. In some cases clients are able to stop paying creditors to cover the attorney fees. In other cases they borrow the money from family or friends. In most cases the money borrowed from family or friends is the best way for them to help you out, if they just give you money to help pay your debt, that does not alleviate the problem. The other option some clients use is sell some personal possessions to cover the attorney fees. The objective after a bankruptcy is to get a fresh start, and get rid of all of the debt. We want to see our clients prosper after filing for bankruptcy, so they can save for retirement and provide for their family.

Minnesota Bankruptcy Lawyers for Chapter 13 Bankruptcy

If you are struggling keeping your home you may want to look at a chapter 13 bankruptcy in Minnesota. A chapter 13 bankruptcy will allow you to keep your home while catching up on past due payments. You may even be able to strip off your homes second mortgage. The other benefit of a chapter 13 filing is that at the end of your plan payments you will also get rid of the remaining credit card and other unsecured debt. We help clients with chapter 13 bankruptcies every day. If you have questions give our office a call.