Many in New York know what it is like to experience financial hardship. In recent years, it has become more common for someone to lose their home to foreclosure while attempting to shed debt elsewhere. Unable to keep up with mortgage payments, the next step for the home becomes foreclosure. According to one couple caught in a similar situation, the only thing they could do was to file for bankruptcy.

The 52-year-old woman and her 59-year-old husband began experiencing serious financial trouble in early 2009. She had lost her job in 2007 and attempted to go back to school to earn a two-year degree in criminal justice. After graduating, she could not find employment in the field. Luckily, her husband was still supporting them with his business, but credit card bills began mounting as the two managed to accumulate more than $30,000 on their cards. According to her, they were paying credit cards with credit cards at one point.

Soon after, the couple realized that it could no longer afford the $1,500 mortgage payments due each month on their home. The woman began working with the bank in an attempt to save their $192,000 home and thought she had succeeded until coming home one day to find a deputy sheriff holding a foreclosure notice for her. Their only option was filing for Chapter 13 bankruptcy. According to their attorney, this has allowed them to save their home and shed their massive credit card debt.

The couple has created a payment plan to repay the owed mortgage payments so they can keep their home. For those living where there are limited mortgage modification options available, seeking bankruptcy protection can provide a crucial lifeline to underwater borrowers.

Source: Reading Eagle, "Foreclosure: 'This has been a nightmare,'" Holly Herman, Dec. 19, 2011