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Zombie Foreclosures Stymy Financial Recovery

Posted on in Bankruptcy

The worst of the housing crisis may be over, but many Illinois homeowners are still facing an uphill battle on the brink of financial insolvency. Filing for bankruptcy may be the best way that a family can keep its home during financial hardship, even with the challenges that bankruptcy itself can present. Bankruptcy can offer some people a way to start over, a fresh beginning, and an opportunity to get out from under crippling debt that keeps plaguing recovery. Filing for bankruptcy can also offer a clean break, an opportunity to re-evaluate the financial practices that led to insolvency in the first place, and a chance to develop different habits to avoid the problem again. And, considering the most recent scare in the housing market, bankruptcy may be the best option for more people than ever since the market began its slow recovery. Zombie foreclosures are the new terror for American homeowners, and Illinois residents have been among the hardest hit.

According to CBS News, “hundreds of thousands of homes in the U.S. are now labeled as “zombie” foreclosures. That's when the owner of a foreclosed home leaves only to find out years later that he or she still legally owns the home and is on the hook for property taxes and other fees.” Florida leads the nation with the most zombie foreclosures, estimated by CBS at about 91,000 properties. Illinois comes in at a distant second, with 32,000 such foreclosures.

The foreclosure process in Florida and Illinois is a judicial one, according to CBS. Steve Cook, managing editor of Real Estate Economy Watch, says this could be one reason these states have so many zombies. “In judicial foreclosure states… it takes an average of 62 months—more than five years—for a foreclosure to clear,” he told CBS. “That's almost twice as long as in a non-judicial foreclosure state, where it takes 34 months.”

Abandoned homes contribute not only to the financial detriment of their former occupants, but also to surrounding property values and neighborhood crime. If you or someone you know has a zombie foreclosure property on your hands, bankruptcy may be a good option. Don't go through it alone. Contact an experienced Illinois bankruptcy attorney today.

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