In a new report in the New York Times (subscription required), credit counselors are finding that mortgage debt is becoming more common in people seeking bankruptcy.
From the article:
“Mortgage debt is coming out as much more significant than we expected,” Ms. Keating said. “Pull this all together with the other unsecured debt people have, and this is really problematic.” The foundation, she added, will intensify its attention to mortgage counseling over the next year, partly in anticipation of more demand from consumers whose home loans are growing more burdensome.
The foundation has been surveying its members to gauge the effects of a federal bankruptcy law signed last year, which, among other things, eliminated some benefits of personal bankruptcy filing.
1 comment:
I cannot understand why folks did not recognize historically low interests rates and lock in a low fixed rate mortgage. People are completely disconnected from reality when it comes to finances. (Which sounds funny coming from someone who filed bankruptcy--mine was due to losing a job and an extended period of unemployment. My debts were nothing like the ones in the article.)
I chalk part of this up to television. Back in the 50s, there was no shame in having second hand furniture and mismatched tableware. Folks now think that their place should like like a magazine spread. They buy things they simply can't afford. I'd love to have a Mac again but there's literally no way I could afford one on my income. If I can't afford it without the use of credit, then I simply can't afford it. Things are going to get very grim when job losses hit from the housing bubble crash.
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