Abstract
In the State of New Jersey alone, there were 31,534 bankruptcy petitions filed in 2012 calendar year. Similarly, as of September 30, 2013, there were 28,882 bankruptcy petitions filed in the state of New Jersey. A typical debtor who is forced into bankruptcy has substantial credit card debt and one or several mortgage liabilities. Unable to pay on the obligations as they become due, the debtor defaults. Once in default and the liability on the debts are over $14,425, creditors can file an involuntary bankruptcy petition and foreclose on the existing properties. New Jersey remains the state with the second-highest foreclosure rate behind Florida, according to CoreLogic’s monthly National Foreclosure Review. Nationwide, 5.55 percent of homes are late on their mortgage payments. Moreover, if any portion of the mortgage debt is forgiven as part of the foreclosure process, it could trigger tax consequences. This paper examines what choices does a debtor have when faced with multiple delinquencies. © 2017 Wiley Periodicals, Inc.
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