The past few years have been difficult for Arizona homeowners, with the housing market collapse and the recession. Among the hardest hit are older generations, with the AARP reporting that more than 1.5 million older Americans have already lost their homes to foreclosure and millions more are poised to do so.
As the threat of foreclosure looms and mortgage payments accumulate, some Americans may consider declaring bankruptcy in order to halt foreclosure proceedings and wipe out most bills to achieve a new financial start.
The figures released by AARP may surprise Arizona residents, but in fact, around 16 percent of homeowners over 50 are underwater--meaning roughly 3.5 million people pay more money for their house than its value.
In addition to this, around 625,000 people aged 50 and over owe at least three months' worth of past-due mortgage payments.
According to AARP, even though homeowners younger than age 50 have a higher rate of loan delinquency than their older counterparts, the rate is increasing much faster for older Americans. In fact, the proportion of seriously delinquent loans held by older people increased by more than 450 percent over the last five years.
A variety of factors may have contributed to the currently pending foreclosure proceedings for around 600,000 homeowners over the age of 50.
Many people in this group have little savings and may have even already gone through their retirement funds. Furthermore, it can be difficult for retirees to recover what has been lost during the recession when living on a fixed income. Additionally, those who are still working may not be earning the same salary they once were.
The increased costs of medical care also may play a role.
According to some sources, some of the people facing foreclosure have never missed a single mortgage payment in around 20 years. Though financial problems may be new to them, Arizona residents struggling with payments should know they are not alone in these difficult times. They should not hesitate to take steps towards easing their financial burden. Declaring Chapter 7 bankruptcy may be the best solution for some homeowners to halt foreclosure proceedings and regain control of their finances.
Source: The Times-Reporter, "Foreclosure crisis hits older Americans hard," July 19, 2012