Massachusetts Bankruptcy Filings, Bank Forclosed Homes Up

by on States

As the economic recession endures, more and more Bay residents are finding themselves with no other option but to file for bankruptcy. Amid job loss, huge consumer debt and growing number of bank forclosed homes, it is not a least bit surprising.

Compared to last year, the new bankruptcy filings went up by 35 percent and approximately 100 percent in the last four years. According to lawyers specializing in bankruptcy, a lot of people who lost their job because of the sluggish economy were left with no alternative but to use up all their savings, max out their credit cards and take out numerous loans that they can not really pay in the first place. To make matters worse, credit card companies have been charging huge interests on unpaid balances, creating more financial problems for these people.

Financial experts call this the “snowball effect” where people are trying to cope with their debts and mortgage payments to prevent their homes from ending up as bank forclosed homes. Unfortunately, these people are not fully aware of what credit card corporations are doing.

Just last month, there were about 1,837 bankruptcy filings compared to 733 last June 2006. on the other hand, rate of unemployment in Massachusetts was recorded at 8.6 percent.

One should remember that people do not usually file for bankruptcy if they still enjoy unemployment benefits. If this runs out, they are no longer capable of paying any of their debts. For some, it was not only the inconvenience of having a bankruptcy entry on their credit report but also the distress of realizing that their home will also be among the bank forclosed homes. There are even those unlucky enough to get sued by their mortgage lender for the amount of money that remained to be owed after the foreclosure.

During the first six months of the current year, the number of bank forclosed homes in Massachusetts reached 18,548 with 1 out of 147 homes entering some stage of foreclosure. Compared to the second half of 2008, there was a 6.24 percent growth. Nationwide, the states of Arizona, California and Florida remains to have the highest foreclosure rate.