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Foreclosure Can Cause Health Problems: Bankruptcy Can Help

Anguish

If you fail to make your mortgage payments, you risk losing your home in a process known as “foreclosure.” In Iowa, the foreclosure process usually begins after a mortgage loan is more than 120 days overdue. But in some circumstances, foreclosure can begin sooner. The foreclosure process usually begins when a lender files a lawsuit asking the court for an order allowing for a foreclosure sale. After filing a lawsuit, a lender then serves the debtor summons and a copy of the lawsuit paperwork. It is usually best for a debtor to answer the court action because failure to answer can result in a default judgment. The danger of allowing the foreclosing party to obtain a default judgment is that once the court grants the default judgment, you will lose the chance to fight the judicial foreclosure. On the other hand, if you respond to the lawsuit by filing an answer, you might have a chance to fight the judicial foreclosure since the case will go through litigation. Unfortunately, if you lose at trial or the judge grants a summary judgment, the court will enter a judgment and order your home to be sold at auction.

Foreclosure has impacted most parts of the nation. According to ATTOM Data Solutions, the parent company of RealtyTrac (a leading firm that monitors and markets foreclosed homes), there were more than 33,000 U.S properties with default notices, foreclosure filings, bank repossessions, or scheduled auctions during the first quarter of 2021. When a foreclosure occurs, the family living in the foreclosed property is almost always obligated to move. Apart from that, foreclosure can have many other negative effects. For example, after a foreclosure, your credit rating will most likely be damaged, and that can affect your ability to move to a new home. A poor credit rating can also negatively impede your chances of getting a job since some employers access credit ratings for new hires.

Foreclosure Can Also Cause Health Problems

According to research, home foreclosure can also cause health problems. One particular study found that the stress of personally experiencing foreclosure can lead to worsened mental health and adverse health behaviors, which can lead to poorer health status. According to the study, the experience of home foreclosure is different from other economic and/or stressful life events in various ways. First, owning a home uniquely promotes self-identity in a way that other economic activities and assets do not and provides what is known as “ontological security.” Losing a home often takes away this self-identity and security, and that can result in stress and, after, health problems. Also, according to the study, foreclosure is usually a lengthy process and often disrupts existing social networks. The lengthy process and disruption of social networks associated with a foreclosure can cause stress and health problems.

Bankruptcy Can Help

If you are currently facing foreclosure, keep in mind that filing for bankruptcy may help. Due to the automatic stay order that usually comes into play after a bankruptcy case is filed, Chapter 7 bankruptcy can delay foreclosure. On the other hand, Chapter 13 bankruptcy can help you save your home.

Contact a Southeast Iowa Bankruptcy Attorney

If you are in Iowa and facing foreclosure, contact a Southeast Iowa bankruptcy attorney at the Noyes Law Office today to find out more about how bankruptcy can help you.

Source:

attomdata.com/news/market-trends/foreclosures/attom-data-solutions-q1-and-march-2021-u-s-foreclosure-market-report/

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