Personal bankruptcy: Mississippi has highest foreclosure rate

More than a month after the New Year has arrived, many Mississippi residents are likely to be reassessing their New Year's resolutions. If one's goal was to become more financially secure, that goal -- like others, such as losing weight -- may have proven harder to achieve than originally thought. In fact, many state residents may be in need of significant debt relief, according to a new report.

A recent report from Black Knight Financial Services reveals Mississippi has the highest rate of properties that are either in delinquency or foreclosure. As a portion of active loans, the rate for Mississippi stands at a little over 14 percent. Coming in second was New Jersey at just under 12 percent, Louisiana at 11 percent, New York at 10.4 percent and Rhode Island at 10.2 percent. The wide geographic variation shows that foreclosure is still a problem nationally. The report also noted that nearly 3 million properties nationwide are past due by 30 days or more.

Some local homeowners may not be aware that filing for bankruptcy can stop foreclosure in some cases. While many understand that personal bankruptcy is a solution to unmanageable debt, many assume it is only credit card debt and similar unsecured debts which are relieved via bankruptcy. In reality, an individual bankruptcy can combat the threat of foreclosure as well. For example, a Chapter 7 bankruptcy can delay foreclosure, while its Chapter 13 counterpart can put an end to foreclosure proceedings. Under Chapter 13, it is possible to include overdue mortgage payments in one's debt repayment plan, so it is helpful to obtain advice from a qualified bankruptcy attorney as soon as foreclosure appears on the horizon.

While it is feasible to avoid foreclosure using the tool of personal bankruptcy, each individual case is unique and may feature several different considerations. Generally, it is important to obtain information from a legitimate source rather than fall prey to the many scams and false promises regarding foreclosure avoidance in Mississippi.

Source: Mortgage Servicing News, "Delinquency rate dips to 5.6%: Black Knight," Evan Nemeroff, Jan. 23, 2015

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