Hawaii residents struggling with mortgage problems and credit debt
This has resulted in a rise in Chapter 13 bankruptcies across the state – up 27 percent from 2009’s figures. In addition, many filings were made as a result of a collapse in the area’s housing market.
“We’re seeing a problem of loans being underwater that we never saw a few years ago,” Hawaii-based attorney Jean Christensen told The Honolulu Star Advertiser. “There was a lot of confusion about loan modification programs, and people waiting for modifications to come through kept falling farther and farther behind on their payments.”
Christensen says it was not uncommon for residents to carry as much as $10,000 to $20,000 in credit card debt prior to the recession, the news source says. However, when the recession hit, this caused many to fall behind on monthly mortgage payments and placed a high number of properties in foreclosure.
The problems will likely continue to persist in 2011 as unemployment in the state currently sits at 6 percent, double the average before the recession.