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Helping good people through bad times

Chattanooga residents deal with potential foreclosure sale

Many Chattanooga homeowners who know what it's like to worry about making ends meet also understand the fear people experience when they hear the word foreclosure. Oftentimes that worry alone makes debt relief seem so far away that it is a dream that is too good to be true. However, it is within reach, as one couple recently found out.

The much maligned Home Affordable Modification Program, or HAMP, has finally kicked in and started to be a source of help for many homeowners. The reason for this is because of how "hardship" is defined to qualify for help, and as such the HAMP funds are more easily accessible to homeowners. As of July, Tennessee has helped 4,123 borrowers keep their home, paying out $116 million of the state's allocated $217 million. The program apparently has a 96 percent success rate even though it is cut off after $40,000 is paid out or three years' worth of assistance. There is help out there as one Chattanooga couple learned, when they had their mortgage payments drop from $1,640 to $873 a month and the remaining balance from $176,000 to $71,000. Though not everyone may be able to see such great results, it shows that help is out there.

Oftentimes homeowners do not realize they need help until it is too late. They think that just because they are working with the bank on a loan modification that the process will save their home. However, once the foreclosure process has been started in Tennessee, it is almost impossible to work with the bank without help. For that reason, one of the only ways to be sure to prevent foreclosure is filing for bankruptcy. While a Chapter 7 bankruptcy will buy an individual or family time, it is often in the Chapter 13 process where a person can get the most help. Chapter 13 can provide a much greater chance to work out the deficiency with the bank and keep a home.

Source: Times Free Press, "Living in the shadow of foreclosure," Ellis Smith, July 14, 2013

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

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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