Five years ago, a year into writing these Bankruptcy in Indiana articles, foreclosure was on my mind. Knowing that a lot of my work as a debt consolidation lawyer centered around efforts to help stop foreclosure, a banker friend from Portland, Oregon had shared a true foreclosure story.
My friend’s neighbor had simply waited too long to ask for help, and there wasn’t enough time for lenders to put together a loan package to save his home. He found out later that if there had been just two more working days to work out an arrangement, the home might have been saved.
Anyhow, my colleagues the Columbus bankruptcy lawyers and I were recalling this story the other day when we read the following headline: “Top foreclosure states in June 2013: Indiana.” Indiana, we learned, actually has one of the highest foreclosure rates in the nation! Bankrate.com puts the national statistics even more ”in-your-face”: One in every 1025 housing units received a foreclosure notice in June of this year!
Here’s how Indiana bankruptcy law relates to foreclosure:
- If homeowners are in the middle of a foreclosure when they file personal bankruptcy, the automatic stay will stop the process right then. Even though the bankruptcy cannot discharge mortgage debt (because it’s a secured loan tied to a property), it can bring things to a screeching halt and buy time for the homeowners to devise a plan.
- Under Chapter 13 bankruptcy law, the homeowners can get current and stay current on the mortgage payments and save the home. One of the exemptions (I was asked to help write the exemptions portion of our state bankruptcy law) is equity in a home. The Indiana bankruptcy homestead exemption allows you to protect $17,600 in home equity ($34, 200 if you are married filing jointly).
The thing is, even though the press is filled with stories about how the economy is growing and coming back from the terrible last few years, foreclosures aren’t going away. In fact, one of the main things our attorneys in all five Zuckerberg bankruptcy law offices are being asked to help with IS foreclosure. And, as we can see from the Indiana statistics, things really haven’t gotten better for a lot of people when it comes to affording their homes.
And a big part of the problem has to do with “zombie properties”, where homeowners in foreclosure have moved out, leaving vacant property. These types of homes have been labeled as “zombie” foreclosures. This is when a homeowner received notice of the foreclosure and moved out, only to find out years later that they still legally owned the home. Indiana is one of the states with a high number of these types of properties.
My Oregon friend’s story is even more relevant today than when it happened five years ago. The lesson – when it comes to your home, whatever you do, don’t procrastinate: at the first signs of financial trouble, not at the last moment, that’s when visiting with an experience Indiana bankruptcy attorney can really do some good!
Categorised in: Bankruptcy Indiana
This post was written by Mark Zuckerberg