Alabama citizens and others throughout the United States have and continue to experience financial challenges. During these hardships, foreclosure may be unavoidable, but there are debt relief mechanisms, such as bankruptcy, that may be necessary and ultimately quite helpful. For instance, when a person files for Chapter 13 bankruptcy, there is potential to stop home foreclosure proceedings from continuing.
Despite the option to file for Chapter 13 bankruptcy, which could end the foreclosure process, the foreclosure rate in Alabama increased by 102 percent from August 2011. There was even another serious shift, within this year, as the foreclosure rate jumped by 41 percent as compared to the month of July.
The reason for the increase could be due to any foreclosures that were originally delayed for reasons such as mediation. Whatever the case, many Alabama families were unfortunately unable to stop the foreclosure process to prevent the loss of their homes.
Chapter 13 bankruptcies set up a payment schedule for individuals to pay their creditors. At the same time, this form of bankruptcy may permanently stop the foreclosure process. The instance in which the Chapter 13 will not stop the foreclosure is if the person in debt filed for bankruptcy within the previous two years and the order to stop the foreclosure was lifted, allowing it to move forward. There are certain requirements that must be met, including personal of income, to be able to qualify for Chapter 13 specifically.
Although the debt relief option of Chapter 13 bankruptcy is available to potentially put an end to the foreclosure process, the rate of foreclosures in Alabama dramatically increased over the course of just one year. With the continued economic hardships and financial problems facing families throughout our state, personal bankruptcy may be a way to clear debt and stop foreclosure.
Source: The Birmingham News, "Alabama's new foreclosure activity surges 102 percent in August," Dawn Kent, Sep. 13, 2012