subject: Average to Low Income Families' Worst Dilemma After Foreclosure: Debt and Bankruptcy [print this page] Average to Low Income Families' Worst Dilemma After Foreclosure: Debt and Bankruptcy
The economy is still in a bad state and the future does not sound so promising either because of the continuous rise of unemployment and foreclosure rate in the country. Although there is plenty of low cost housing available in every state, not everybody can afford such luxury since a number of American workers are only earning a meager 15 USD per hour. This is only enough to keep their families afloat for a day and owning a home with this kind of salary will only lead to foreclosure in the future. According to a report by the National Low Income Housing Coalition, the average American worker earns around 23,000 dollars each month and the amount is not enough to afford even a simple two-bedroom apartment which usually costs around 1 thousand a month. This is a sad realization since it also goes to say that more American families cannot afford to buy their own homes. If you have a good credit score, most lenders can give you a loan for the mortgage down payment but even with this, it will only eventually lead to default payment and consequently, foreclosure. After foreclosure, the average to low income families will be left without a home, with bad credit scores, and with imminent bankruptcy in tow.
The growing need of families for an increased income has prompted the Congress has to increase the minimum wage from a meager $6.55 per hour to $7.25. However, housing costs are still too much for average American families even with the increased income. Part of why they do not want to purchase a new home is because of fear of the after foreclosure effects. Furthermore, their accrued debts prohibits them from the freedom of acquiring a new home thus, they are locked up on almost uninhabitable housing.
After foreclosure, many low-waged debtors usually file for bankruptcy as this will free them from specific types of debt and can liberate their income. Before bankruptcy filing, anyone with debt immediately direct their income in paying of their obligations. Filing for bankruptcy can redirect your income from paying off your debt to more productive things such as education, housing, and daily expenditures. Before filing for bankruptcy, think of other solutions first because once you are declared bankrupt, your credit score will be adversely affected for years.
