Dallas, TX (PRWEB) September 24, 2011
Allmand Law (http://www.allmandlaw.com) has redoubled its efforts to fight foreclosure in the Dallas-Fort Worth as a disturbing trend of mortgage defaults and foreclosures continues to grip the poor and middle-class. According to a report released by Foreclosure Listing Service, Inc., more than 83% of all foreclosures in Dallas-Fort Worth were for homes valued under $200,000 and many of them had underwater mortgages with no equity. And while the overall number of foreclosures decreased in the Dallas-Fort Worth area, homes valued below $100,000 saw a foreclosure filing increase of 7 percent. An increase which is a sign that we may already be in a double dip recession, according to Allmand Law’s managing partner, Reed Allmand.
“The little man is getting hurt right now because of job losses and mortgage servicers who don’t want to adjust to the market,” Allmand said. “Instead of giving middle-class and working-class homeowners a chance to save their home, many mortgage servicers quickly move to file foreclosure. That’s what we’re facing right now.”
Unemployment in the Dallas-Fort Worth area has continued to creep upward, hitting ordinary workers the hardest. Most homeowners have at least a few months of expenses in an emergency fund just in case they lose their job; but because unemployment often stretches on for a year or more, a few months savings is not enough. Even homeowners who have prepared for unemployment, worked a steady job and did everything the right way are still facing foreclosures. There are few programs for unemployed workers that will help them save their home from foreclosure and mortgage modification programs such as HAMP have failed miserably. Unemployed homeowners filing bankruptcy can at least surrender their home and avoid the often nasty aftermath of foreclosure which can leave them with a new debt problem.
“In Chapter 7 bankruptcy, a debtor can surrender their home and have any mortgage balance discharged,” Allmand said. “In effect bankruptcy saves the debtor’s future income from the mortgage servicer who has a right to pursue payment if the debtor has not received a bankruptcy discharge.”
Outside of bankruptcy, a homeowner who suffers foreclosure can suffer deficiency judgments which can leave them mired in debt for years to come. The new debt can encumber assets and income resulting in expensive litigation which could have been avoided if the debtor filed bankruptcy. Allmand Law hopes to make homeowners facing foreclosure aware of the problems of just ignoring foreclosure deficiency judgments and encourage them to consider how bankruptcy can alleviate a lot of problems associated with foreclosure.
“One of the issues of foreclosure is that a homeowner is often left with a large balance because their mortgage is underwater,” Allmand said. “After a foreclosure auction the homeowner may still owe $20,000 or even $40,000, only bankruptcy can wipe that debt out.”
But Allmand insists that homeowners shouldn’t wait until after they suffer foreclosure to file bankruptcy. Homeowners can also use bankruptcy to save their home from foreclosures if they are employed. Chapter 13 bankruptcy allows debtors who have a job, to pay off their debt over the course of 3 to 5 years and keep their home out of foreclosure. But the benefits offered by the bankruptcy system are only available if the debtor moves quickly and effectively.
Reed Allmand is a Board Certified Consumer Bankruptcy Attorney, the managing partner of the law firm Allmand Law and NACBA’s State Chair for the Northern District of Texas. He has been practicing bankruptcy law for nearly 10 years and has handled more than 3,000 bankruptcy filings. Allmand has appeared on “Money for Breakfast” on Fox Business News and is the author of “The Truth about Bankruptcy.” To speak with Mr. Allmand or to schedule an interview, please call (214) 265-0123.