With adjustable rate mortgages coming due, foreclosures are on the rise. For many a consumer, bankruptcy does not follow far behind. Yet in recent months Nevada bankruptcy filings have shown that when done correctly, they can stop foreclosures before they even occur, thus protecting a desperate consumer from one of the most insidious financial mistakes she or he could be making.
Generally speaking, a foreclosure proceeding is a mortgage lender’s attempt at recovering any moneys due that a borrower is unable or unwilling to pay. If the borrower is upside down in the loan – in other words, she or he owes more on the home than it is actually worth or will fetch during a foreclosure sale or auction – the remainder is still due and owing and the borrower will find that in addition to having lost a home, she or he will now also face a judgment and possible collection proceedings.
Nevada bankruptcy filings are stopping foreclosures because a home is protected during a bankruptcy proceeding, giving the borrower the extra time needed to come up with the funds to bring the mortgage current and thus at least save the home, even as a car may fall victim to the bankruptcy dealings. In the same vein, by avoiding a foreclosure, a borrower is in a better position to once again own a home in the future since a foreclosure is one of those notations on the credit report that will follow her or him around for a very long time indeed!
Who has not heard the tale of the kind mom or dad who sought to help out junior by cosigning on a car or home loan? Then again, perhaps it was a good friend who needed help and as such a spouse may have chosen to cosign a loan application without first conferring with their mate. A few short months later, the friend is unemployed and has defaulted on the loan, leaving the spouse on the hook for a payment she or he cannot possibly afford.
Perhaps the cosigner’s fiscal situation also has changed and thus what may have been a possible debt a few short months ago is now a problem of insurmountable proportion. While this spouse may be in hot water with their mate already, the temperature is only bound to rise when considering that those couples residing in community property states will have to both bear the brunt of the financial misstep.
Thus, anyone residing in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin will do well to think twice to pledge for another on the dotted line of a contract! Thus, Washington state bankruptcy filings are in some cases the only avenues left open for a marriage partner’s fiscally unsound decisions, which now affect both parties of the marriage.
Even as other avenues are open to get out from under the fiscal obligation, the fact that the original debtor more often than not is unable to qualify for the loan in her or his name lends credence to the fact that the cosigner is more often than not stuck for the financial obligations and it is wise to never, ever cosign on a loan, unless you can easily afford the payments.