Those who follow our Florida Bankruptcy blog read about the helpful hint last week that seeking counsel or taking action early when confronted with debt is often the best decision. Our prior post focused on how waiting until after the foreclosure judgment has been entered doesn’t leave a lot of room for changing the outcome of that process and keeping the property.
Fear of literally losing the roof over their head has a lot of Florida residents and citizens across the nation shifting their debt around. The worry that the housing crisis created in the minds of American homeowners hasn’t shaken easily. In fact, in order to avoid the negative consequences millions of people suffered when their homes “went under,” millions of homeowners have shifted their focus to reducing mortgage debt.
Paying down a mortgage leaves more room for options in the future, not just a way to continue owning the property. An underwater home is one in which the individual owes more than the home is actually worth. Paying down the mortgage debt can pull the home back out, making it more possible to sell the home for whatever reason. It also makes a second mortgage or equity lines of credit possible should an unexpected event occur, like large medical bills associated with an illness.
Americans have worked hard in this effort, reducing total consumer debt by $74 billion in the third quarter. Although the average debt was reduced, credit-card debt rose by $2 billion, $18 billion worth in car loans was added and another $23 billion increase in student-loan debt. Financial experts even predict that despite the third-quarter reduction, average individual debt will increase from $4,996 to somewhere around $5,446 by the time 2013 closes.
While paying down the mortgage first can help keep a family in their home, shifting debt from one source to another doesn’t eliminate the problem. So, again we caution our readers to take action early in order to leave themselves in the best possible place and with the most options for a real debt solution.
Source:TIME, “Why More Americans Will Fall Behind on Credit-Card Bills This Year,” Martha C. White, Jan. 7, 2013
Whether you have questions about credit card, medical or unsecured debt of any kind, our Florida website provides information about debt solutions that work and access to attorneys highly experienced with these types of cases.