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High Levels of Bankruptcy Filing and Foreclosure Continue in Utah
Many Utahns are still in dire financial straits: Utah bankruptcy filings are at their highest level in five years. As another sign of the economic stress that Utah homeowners face, one in 159 homeowners is in foreclosure in Washington County.
March 17, 2011 /Financial PR News/ -- Two barometers of the economic health indicate all is not well for many in Utah. A report compiled by the American Bankruptcy Institute shows that Utah bankruptcy filings are at the highest level in five years, according to a story in the Salt Lake Tribune.
A second report from industry observer Realty Trac noted that Washington County led the state in foreclosures, with one in every 159 homes in foreclosure.
The stories they tell lend credence to the belief that Utahns are still in dire financial straits. After two years of a faltering economy, there is little sign of improvement. Realty Trac pointed out that but for the controversy surrounding the mortgage documentation in foreclosure cases, the numbers nationwide would have been even higher.
Utah Bankruptcy Filings Increase 24 Percent
In spite of the bankruptcy reforms enacted in 2005 and the tightening of the eligibility for filing some types of bankruptcy, filings in Utah hit a five-year high in 2010.
The U.S. Bankruptcy Court for Utah received 17,968 bankruptcy petitions last year, a 24 percent increase from the 14,481 filings in 2009, while nationwide, consumer bankruptcies increased only nine percent last year.
Of the bankruptcy petitions filed in Utah last year, 66 percent of the filed bankruptcies were Chapter 7. Also known as liquidation or fresh start bankruptcy, this chapter of the bankruptcy code allows the petitioner to receive a discharge for most debts and begin with a fresh start for their finances. Eligibility for Chapter 7 bankruptcy is governed by a means test, so not everyone can file a Chapter 7.
The other 34 percent were Chapter 13 filings. The Chapter 13 uses a 3- to 5-year repayment plan that the debtor can use regain control of the finances, without harassing phone calls and non-stop mailings. If you have a house that you are trying to save from a foreclosure, a Chapter 13 filing may be better suited to your needs.
Samuel J. Gerdano, the American Bankruptcy Institute's executive director said, "The steady climb of consumer filings notwithstanding, the 2005 bankruptcy law restrictions demonstrate that families continue to turn to bankruptcy as a result of high debt burdens and stagnant income growth."
Many Older Utahns Filing Bankruptcy in 2010
Many of the bankruptcy filings are being filed by elderly persons, and Rob Ence, executive director of AARP Utah, said Utah's elderly can be particularly vulnerable because many are living on fixed incomes.
He said there has been a freeze on cost-of-living increases for those on Social Security and that "a lot of our seniors are still having to deal with rising food and utility costs. Many on Medicare still have to come up with 20 percent of their medical expenses out of pocket."
If you financial position has become perilous and you are falling behind on bills and worried about the possibility of losing your home to foreclosure, speak with an experienced bankruptcy attorney. They can examine your situation and give you advice on potential strategies to rebuild your financial health and possibly protect your home from foreclosure.
Article provided by Greg Smith & Associates
Visit us at www.bankruptcyattorneyinsaltlakecity.com
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