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SOUTH CAROLINA
BANKRUPTCY ATTORNEY

Bankruptcy can save borrowers from "zombies"

When a South Carolina homeowner is experiencing severe financial trouble, one of the first concerns involves whether to let one's home go into foreclosure. For many, existing debt levels are so as to make walking away from their home seem like the best possible option. One recently published piece, however, warns that it may not be so easy. It appears that 'zombie' foreclosures are on the rise, and homeowners should be aware of the risks associated with allowing a home to go into foreclosure versus staying in the property under Chapter 13 bankruptcy protection.

A zombie foreclosure occurs when a homeowner is notified by the bank that they must vacate the premises in advance of a sale or auction of the property. The family moves out as ordered, and moves on with their lives in a new location. However, the sale of the home does not take place as planned, and the homeowner remains liable for property taxes, homeowner's association fees and other expenses.

In many cases, homeowners are completely unaware that they are still technically the owner of the home until the bills catch up with them. By that time they are already firmly established elsewhere. They often find themselves caught in a worsening debt scenario than would have occurred if they had remained in the home and filed for bankruptcy.

Chapter 13 bankruptcy can help a South Carolina homeowner not only avoid a zombie foreclosure, but can also allow them to keep the home that they have invested in. Chapter 13 allows a consumer to restructure their debts and maintain certain assets. In addition, it is still possible to have some forms of debt discharged under Chapter 13. For individuals who are facing the loss of their home, it is worth the effort to determine if filing for Chapter 13 bankruptcy is a savvy financial move.

Source: CNN Money, "Zombie foreclosures: Borrowers hit with debts that won't die," Les Christie, Feb. 22, 2013

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Reed Law Firm, P.A.
220 Stoneridge Drive,
Suite 301

Columbia, SC 29210

Phone: 803-726-4888
Fax: 803-726-4887
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Suite B

Florence, SC 29501

Phone: 843-679-0077
Fax: 843-679-0667
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