After a long period of being constrained by a struggling economy, it can take a while for the tide to turn. Many economic and financial statistics are beginning to show improvements throughout Alabama and the rest of the country, but the numbers still often paint a bleak overall picture. For Alabama residents who are not yet seeing the light at the end of the tunnel, bankruptcy can provide some needed relief from burdensome debt to bring financial stability within reach.
Statistics related to foreclosures in Alabama reveal that the percentage of foreclosure-related sales is dropping. Unfortunately, Alabama still has the dubious distinction of being ranked ninth in the country for the number of distressed sales. In the fourth quarter of 2012, the percentage of distressed sales in Alabama fell nearly 17 percent compared with the fourth quarter in 2011. As a result, the overall 2012 number of foreclosures in Alabama dropped almost 23 percent compared with 2011. Alabama achieved its ninth-place ranking, however, because almost 50 percent of all home sales in the state were classified as distressed, which included foreclosure-related and non-foreclosure-related short sales.
When Alabama residents bought homes years ago, they likely did not anticipate the dramatic fall in home values or the challenging economic conditions that the country has recently endured. Protecting a home and finding ways to stop foreclosure become important concerns for Alabama residents when they begin struggling to make ends meet due to job loss, overwhelming credit card debt, or other unexpected financial circumstances. Chapter 13 can offer many potential benefits to people in this position as it can prevent wage garnishment and asset repossession and allow families to avoid losing their homes.
Chapter 13 is a workable debt relief option for many eligible consumers because it allows people to create a feasible repayment plan that spans a period of three to five years. Because the essence of the plan is reorganizing a person's debt to make it possible to repay it, filers must demonstrate their ability to make regular payments for a court to order the plan. For this reason, Chapter 13 bankruptcy is well-suited for people who have regular income but just cannot currently meet their financial obligations. Consulting with a bankruptcy attorney can help Alabama residents determine if Chapter 13 or another form of bankruptcy can help them on their way to a fresh financial start.
Source: Birmingham Business Journal, "Alabama foreclosures fall in 2012," Ryan Poe, Feb. 28, 2013