US announces plan to delay foreclosures

Kim and Robert Canfield filed for bankruptcy last summer to save their home from foreclosure. The Saugus couple makes about $5,500 a month after taxes. Their monthly mortgage payment had climbed above $3,000. The house has been in Robert's family since the 1920s, but they could no longer afford the payments.

Bankruptcy courts are empowered to reduce debts to manageable proportions for people who file under Chapter 13 of the US Bankruptcy Code. A rush of people similarly desperate to keep their homes contributed to a 57 percent increase in Chapter 13 filings in Massachusetts for the fiscal year that ended in September.

But as the Canfields learned, there is one debt the courts can't touch: The mortgage loan on the home where you live. Bankruptcy courts are better equipped to save your car than to save your home. read more