When homeowners are placed in a position where they must give up their residence, the loss can be profound. However, receiving final foreclosure papers can also be a relief for many individuals who have become exhausted by the process of fighting for their homes. In many instances, foreclosure is like divorce. It can be terribly painful, but it can also serve as an opportunity for taking the next step in one's life in a fresh and positive way. Once the burdens of mortgage payments are relieved, one can often breathe easy enough to envision the next step to be taken.
However, too many homeowners across the nation are continuing to be burdened by debt related to their homes that have already been finally foreclosed upon. This kind of debt is called "zombie debt" due to its ability to haunt and plague the former homeowner, even though the mortgage debt is supposedly dead and buried.
This zombie debt can appear in a variety of forms. For example, some former homeowners are sued by local municipalities because their foreclosed-upon home is somehow in violation of a given housing code due to disrepair, weed growth, sewer issues or illegitimate back taxes.
Or, banks, the Social Security Administration and other lenders and benefits administrators can list a foreclosed-upon house as a current asset and can deny individuals benefits or credit as a result. There are even reported cases in which homeowners' names remain on a property's title despite a final foreclosure judgment.
Former homeowners are generally not responsible for zombie debt. However, this debt that will not die can plague individuals for years if action is not taken. If you are being affected by some form of zombie debt, please contact an experienced attorney who can help you stop the madness.
Source: Reuters, "Special Report: The latest foreclosure horror: the zombie title," Michelle Conlin, Jan. 11, 2013