California home sales were 45% foreclosed homes which drags down the market

Foreclosures currently represent 45% of all existing sales in California while nationally the number is at 28%. There are 3 years of inventory for foreclosed homes that will clog the market and keep the housing market from jumping back. As a bankruptcy attorney in Palm Springs and Palm Desert I have seen the banks continually postpone foreclosures as they do not want to release more homes into an already depressed and saturated housing market. I have had multiple cases that I was about to file and consistently the banks postpone the foreclosure month after month. Its good for my clients who are living Mortgage free for months but will probably create a slower recovery so I am torn on this issue. Bankruptcy can stop a foreclosure on the brink of a trustee sale and keep the home from being foreclosed on for at least an additional 3 months and I have seen it take 6 months after filing a bankruptcy (chapter 7) for a foreclosure to start again. This is for people with no intentions of keeping there home but who need to save money and buy time in their current homes. Chapter 13’s are for people who just need time to get caught up on arrears but want to save their homes. Chapter 7 you can keep your home but if you have arrears you’ll have to get caught up quick or the bank can move forward with general foreclosure guidelines.

Foreclosed homes really drag the market down and can help with Comps if you want to strip an upside down mortgage. When junior liens no longer have value because current maket value on homes is below what the first is owed, we can strip those liens in a chapter 13 and treat them as unsecured debt and have them discharged. Foreclosed homes and so called REO’s are usually sold for 35% below market value where as short sales are sold around 10% below current market value. All these conditions lead me to believe that Bankruptcy will continue to be a way out and relief for home owners. Talk to a riverside county bankruptcy attorney in regards to options that you have in saving your home or buying time to live in your home so to save money and move forward with your fresh start.

Frequently Asked Questions: Debt Consolidation in California
How does debt consolidation affect credit scores?

Initially, it might cause a slight dip due to credit inquiries. However, consistent payments can improve your credit score over time.

What is the difference between debt consolidation and debt settlement?

Debt consolidation involves taking a new loan to pay off debts, while debt settlement is negotiating to pay less than you owe. Settlement can negatively impact your credit score.

What are secured vs. unsecured debt consolidation loans?

Secured loans require collateral (like a house or car), usually with lower interest rates. Unsecured loans don't require collateral but typically have higher rates.

Is debt consolidation right for me?

It depends on your total debt, interest rates, credit score, and payment capability. It's suitable if you can pay off your debt within five years and secure a lower interest rate than your current debts.

Should I consider long-term financial planning?

Yes, debt consolidation should be part of a broader financial strategy including budgeting, cutting expenses, and building an emergency fund.

How do Chapter 7 and Chapter 13 bankruptcies in California differ?

Chapter 7 involves liquidating assets to pay off debts, while Chapter 13 allows debt restructuring over a set period, usually three to five years.

Can my spouse's bank account be garnished for my debt?

Bankruptcy laws offer protections against such actions, but specifics depend on individual cases and state laws.

How can I learn more about my options?

Consulting a California bankruptcy attorney can provide clarity. Firms like The Law Offices of Christopher Hewitt offer free consultations to explore debt relief paths.

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