Unemployment, divorce, personal tragedy, and rising interest rates are just a few of the many reasons people cannot afford their mortgage payments. As a result, home foreclosure in Rhode Island and Massachusetts is at an all time high. What can be done?

The most important question to answer is this: if you could instantly catch-up on your mortgage today, can you truly afford the regular monthly payments going forward?

For some clients, it may make sense to give up the house and file a Chapter 7 bankruptcy if the house is no longer affordable. This should wipe out the mortgage deficiency and buy you some time (1-3 months) before you are forced to move out. Also, if there is a little equity worth protecting, a Chapter 7 could also stop foreclosure and give you a few months to sell your home through a realtor.

For others who just need a little time to catch up, a Chapter 13 bankruptcy could stop the foreclosure and possibly save your home. If preventing foreclosure is your best option, you would continue to make your regular monthly payments, and set up a Chapter 13 plan for repaying the deficiency. Finally, it may be possible to strip off a second or third mortgage that is completely unsecured. This is often done when the value of your house is worth less than your primary mortgage balance. By not having to pay the “unsecured” second and third mortgages, you may then be able to afford the house.

When should you contact a bankruptcy attorney? If you are soon facing foreclosure, you need to call today. Even if you are working with a mortgage broker to try and refinance the debt, contact Attorney Buckley. The sooner you act, the more time and options you’ll have to prevent the foreclosure. You’ll also be able to minimize foreclosure expenses and determine if filing bankruptcy is right for you.