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Despite rebounding housing market, some still in deep debt

The news continues to trickle in of signs of an improving economy, including a rebounding housing market. While Colorado was one of the first states to be hit hard by the foreclosure crisis a few years ago, Colorado is now ranked near the bottom of states with homeowners considered delinquent on their mortgage. Indeed, state filings are listed at the lowest levels they have been since 2007.

Despite the good news of the recovering housing market, many homeowners are still in need of help in order to save their homes. Fortunately, options exist for these homeowners, including state programs and Chapter 13 bankruptcy.

As discussed previously in this blog, state and federal programs have been instituted in order to help homeowners alleviate some of their mortgage problems. For example, some delinquent borrowers can use one program to obtain a loan that can be used to catch up on mortgage payments.

Yet, only certain individuals qualify for these state and federal programs. What's more, individuals may have more debt problems than their home mortgage, whether it be through credit card debt or otherwise. These individuals may find that filing for Chapter 13 can help to stop foreclosure of their home.

During Chapter 13, an automatic stay is imposed that tells creditors to cease their collection activities, including an agency trying to foreclose the home. If individuals can save enough money, they can cure their arrearage in a Chapter 13 repayment plan over a three- to five-year period. Accordingly, while the housing market has rebounded for some, others still may find Chapter 13 to be necessary in order to obtain a fresh financial start.

Source:, "Gilbert: while foreclosures lessen, help remains available," Sara Gilbert, May 3, 2013

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