Since the economic recession hit, many Tennessee residents have suffered significant financial challenges. When a family is living day-to-day without a reserve of emergency funds, any little setback can be devastating and quickly create a ripple effect of hardship. When someone loses a job or does not receive expected income, for example, the family’s home can soon be at risk of foreclosure after just a few missed payments. This is similar to what happened to a Tennessee woman.

A woman from Chattanooga, Tennessee, was struggling to keep her home despite being told repeatedly that foreclosure was looming. The house provided shelter and needed support to the woman and her special needs son. The mortgage company was threatening her with foreclosure because she had gotten behind on her mortgage payments, in part because her ex-husband had not paid more than $15,000 in back child support. Fortunately, however, the woman learned of a program that helps homeowners avoid foreclosure with federal funds and was able to save her home.

Although this woman’s story seems to have ended happily, not all people are eligible for the federal programs that provide mortgage assistance. Other people may live in areas where such programs do not exist. Fortunately, there are other options that can help people struggling financially avoid foreclosure. In some cases, mortgage fraud may have been the issue. People at risk of foreclosure who have been the victim of mortgage fraud can consult with an experienced attorney to find out what kinds of legal recourse may be available to protect their homes.

If the issue is not mortgage fraud but instead insufficient income compared to monthly expenses, bankruptcy may be the solution. There are different forms of bankruptcy, but filing under Chapter 7 and Chapter 13 can prevent people from losing their home to foreclosure. Chapter 13 bankruptcy focuses on a repayment plan, for example, which allows people to catch up on mortgage payments over a period of five years. This can be all the time that is needed to regain financial stability depending on the circumstances.

Source: NewsChannel9, “Foreclosure Prevented: Chattanooga Mom Charting New Path For Her Family,” Calvin Sneed, June 20, 2014