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For those expecting foreclosure settlement checks, be careful

As our Chattanooga readers may know, people who have suffered through a wrongful foreclosure may be getting some relief in the form of small checks soon. However, if they were expecting debt relief from those checks, they may have to wait a bit longer.

The most recent reason for the waiting is because apparently some of the checks that were supposed to go to homeowners who had been wrongfully foreclosed upon had bounced. The checks could not be verified that they would clear. However, that problem has apparently now been fixed. The checks were being issued for anywhere from a few hundred dollars up to $125,000 for extreme offenses. The good news is that the issues seem limited to only a dozen or so people, while over 207,000 checks had been cashed for over $200 million.

In most instances the check is unlikely to be significant enough to solve all financial challenges. While it may be helpful for a little debt relief, anyone who is still in need of assistance might need more than just a few hundred dollars. For those people, filing for bankruptcy may be an option. A consumer bankruptcy, whether it is a Chapter 7 or Chapter 13 filing, is one of the only sure ways to eliminate debt, prevent foreclosure and to finally get on the path to a fresh start.

Dealing with financial challenges is a difficult process for almost anyone. For some Chattanooga residents filing for bankruptcy can be the best option in a bad situation.

Source: Forbes, "Latest Bureaucratic Bungle Of The Foreclosure Settlement: Bounced Checks," Morgan Brennan, April 18, 2013

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-954-7180
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Fax: 423-624-0509
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