Double-Dip Recession Looming

There has been some debate whether we are still in a recession or if we have already recovered.  Statistics and bloviating politicians are not required to assess what most Americans already know: the economy has not improved since 2008.  In fact, signs of a double-dip recession are manifesting themselves.  This means more people will find it difficult: to stay in the homes which are losing equity, to find a job and to pay back debts which have accumulated due to the 3+ year recession.  Bankruptcy is an option where individuals severely affected by the recession can use in order to get a Fresh Start and hopefully relieve the burden of unmanageable debts caused by circumstances out of their control.

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Double Dip Housing Market Now Official

Due to the prolonged recession and the unwillingness of lenders to modify or refinance home mortgages, housing market prices have now officially dropped below the previous lows in March 2009.  What this means is that more and more homes will be underwater.  A house is underwater when the value of the home is below the balance of a mortgage.  In these cases, many people decide is doesn’t make sense to keep making payments and simply “walk away” from their homes.  There are some negative consequences of course: the home will eventually be foreclosed and the mortgagor(s) will be personally liable for the difference between the mortgage balance and the amount the lender receives when they sell the foreclosed home.

Filing for Chapter 7 bankruptcy can extinguish the personal liability of the mortgage.  A warning: mortgages are often co-signed (by the husband or wife) so both would have to file jointly for bankruptcy if they want to get rid of the personal liability.