The bankruptcy pattern has been interesting. In the months before new bankruptcy laws took effect in 2005, we saw a spike in the number of filings, as people rushed to file before the stricter laws would make it more difficult. As expected, filings declined after the new law forced consumers to clear more hurdles before getting their financial fresh start.

But while it’s too soon to evaluate the numbers, there appears to be a recent increase in bankruptcy filings and some experts think this may be part of the fallout from the creative financing deals that became so popular a few years ago and that are being credited with the rise in foreclosures. Some observers are predicting that many homeowners will try to use bankruptcy to keep their homes as their monthly mortgage payments increase by an unmanageable amount.

If you are a foreclosure investor, particular if you look for preforeclosures, this is a trend to watch. The biggest competitor foreclosure investors have is NOT other investors but bankruptcy. When people give up and let the bankruptcy courts take over, you can’t help them.

We’ll keep watching the trends. Stay tuned.

Jackie
Chief Blogger
Wealth Intelligence Academy