New foreclosure laws led to fewer Washington-area residents filing for bankruptcy in the past year, according to the Washington Examiner. From June 2010 to June 2011, bankruptcy filings dropped 8.7 percent in Washington DC, 4 percent in Eastern Virginia and 2.1 percent in Maryland, data from the Administrative Office of U.S. Courts showed.
The decline is a sharp contrast to between 2009 and 2010, when filings increased 26 percent in the District, 15.4 percent in Eastern Virginia and 36 percent in Maryland.
A new foreclosure program that went into effect on May 25 for DC requires mortgage companies to mediate with homeowners before foreclosing, when lenders previously were only required to file a notice of foreclosure with homeowners. Maryland put a similar program into effect in July 2010 that also reduced the number of foreclosures statewide.
What remains to be determined is if the programs have only delayed the bankruptcy court activity. As Samuel Gerdano, director of the American Bankruptcy Institute, told the Examiner the economic woes have “stunted consumer spending and, consequently, household burdens, which are the leading causes of personal bankruptcies.”
“This is a really an economic force that is more powerful than laws passed by Congress,” Gerdano said. “There are no more arrows left in the government quiver.”
While such foreclosure programs have decreased the number of bankruptcies, a majority of homeowners cannot live mortgage-free. If you are still struggling through hard times, want to end creditor harassment and have questions about how to file bankruptcy, you should contact a Washington DC bankruptcy attorney you can feel comfortable working with and will walk you through the process step by step.
The Law Firm of Kevin D. Judd – Maryland bankruptcy lawyer
