In what may be one of the biggest ironies of the recession, financial experts are now saying that the more money Arizonans borrowed on their homes during the housing boom, the less likely they will be to have to pay any of the money back – that is if they file for bankruptcy protection and get their home equity loans charged off as unsecured debt.
People who borrowed money against their homes and have now hit hard economic times through job loss, illness or other unexpected financial disaster have a pretty good chance of not having to pay back home equity loans or lines of credit in a bankruptcy.
Lenders have reportedly written off $30 billion of these loans in 2009 – more than they wrote off on primary mortgages that year. Much of this is due to banks following questionable – even predatory – lending practices that gave out huge equity loans on inflated housing values. Once the housing market tanked, the asset that backed the loan (the house) no longer had the value required to cover the original loan.
“Walking away” from any credit obligation is no easy matter. Anyone with a sizable home equity loan who is considering filing for bankruptcy protection should consult a reputable Arizona bankruptcy attorney so that they can be advised on the financial consequences of the various bankruptcy relief options available to them.
At The Zolman Law, we believe that your life shouldn’t be defined by debt. We have helped hundreds of people just like you find the relief they deserve from harassing bill collectors, paycheck garnishment, foreclosures proceedings, and – most importantly – the constant worry about money and what to do about your debts.
We are a dedicated debt relief law firm. We help people from Phoenix, Mesa, Gilbert, Queen Creek, Chandler, Scottsdale, Apache Junction, Tempe and throughout Arizona file for bankruptcy or work through tough tax problems every day. We can help stop the debt cycle and give you relief from your overwhelming, burdensome, and crushing debt. Please don’t wait another moment. Call us right away – our attorneys will help get you the fresh start you deserve.