Castle Law Office Blog | Missouri & Illinois Bankruptcy Legal Blog

Study: Many People Declare Bankruptcy To Save Their Homes

According to a study conducted by Consumer Credit Counseling Service (CCCS) between April and July of this year, one in five consumers who declare bankruptcy this year will do so to avoid a home foreclosure. The study surveyed 50,385 bankruptcy filers, 10,682 of which said that the threat of home foreclosure was the number one reason they were seeking bankruptcy protection.

Altogether, 21.6 percent of those who filed for bankruptcy did so in order to save their house. Filing for Chapter 13 bankruptcy allows consumers to reorganize their debts and develop a repayment plan. Chapter 13 bankruptcy can protect homeowners from if filers can consistently pay their monthly mortgage payments. Mortgage terms aren't typically modified during a Chapter 13 bankruptcy.

"Our research shows that tens of thousands of Americans are turning to bankruptcy to avoid foreclosure," said Suzanne Boas, president of CCCS of Greater Atlanta, in a press release.