Foreclosure, Bankruptcy and The Homestead Exemption

I was watching Connie Thompson on ABC News today. She was talking about how filing bankruptcy may help troubled homeowners avoid foreclosure using the “homestead exemption.”

The homestead exemption was created to protect families from losing their homes in hard times. It makes bankruptcy a safety net that could keep the roof over your head even if you're facing foreclosure.

The new law aids homeowners who file for bankruptcy by protecting $125,000 of their home equity from creditors. That equity is not protected from your mortgage creditors but depending on your circumstances, filing bankruptcy may enable you to restructure your mortgage payments and other debt, and as a result, stay in your home .

I was looking for the latest information on foreclosure rates for Washington State and could not find a site yet that was up-to-date. I did, however, find a site for the Attorney General of Washington State that has some very interesting information under the title of “Avoid the foreclosure “rescue” trap.”

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