The sky is falling on "Elizabeth's" family in South Memphis.
Her e-mail says her step-father lost his job. Doctors diagnosed her mother with breast cancer. Now her mother might lose her job, too:
"They are about to lose their house and my Uncle said that if they file for bankruptcy they can live in their house for a year without losing it. Is that true?"
No, that's not true. Bankruptcy is not the solution.
We have enough bankruptcies in the Mid-South, and they're killing everybody's credit.
In fact, bankruptcy attorney Bruce A. Ralston (http://www.memphisbankruptcylawyer.com/) says a standard Chapter 7 bankruptcy might let Elizabeth's parents stay in their house another three or four months at the most, but the lender will eventually get the house. Then they'll have both a bankruptcy and a foreclosure on their records.
Not the way to go.
Ralston says if Elizabeth's parents have not foreclosed yet, they should seek a HUD-approved counselor to help them stay in their home.
The Memphis Housing Counseling Network can connect them with a counselor free of charge. In fact, you should never have to pay for a HUD-approved counselor. The service is supported by our tax dollars.
Reach the Memphis Housing Counseling Network here: 901-725-8361 or http://memphis.earnbenefits.org/page.php?pageID=607.
You can also go to the FHA site at www.fha.gov or call HUD's housing counseling and referral line at 1-800-569-4287.