Why Foreclosures Have Been Rising In Nevada & Nationwide

A home foreclosure can be initiated for any violation of a mortgage contract’s terms, but it happens most often due to the homeowner’s failure to make timely payments. That means the foreclosure rate typically increases during times of economic turmoil. Unfortunately, that’s just what is happening here in Nevada. Nevada is experiencing some of the highest home foreclosure rates in the country, even topping the rankings for the month of July 2025 with 1 in every 2,326 properties in default. If you are among these homeowners, or fear you may soon be, bankruptcy can provide debt relief and protection from home foreclosure and other collection efforts. Learn more today with your free consultation with Las Vegas Bankruptcy Lawyers today- call 702-370-0155 to get started. 

Factors Leading To Increased Foreclosure Rates

There are various factors that have led the home foreclosure rate to spike so sharply in recent months. Some are more relevant than others in Nevada because we face our own unique pressures. Rising costs that make it harder for homeowners to avoid foreclosure include:

• HOA fee increases: When the cost of living rises, it causes other services and utilities to become more expensive as well. Many homeowners belong to homeowners’ associations, or HOAs, and pay fees each month in addition to their mortgage, property insurance, etc. Most HOAs have the authority to increase their fees as much as they want at any time, and issue special assessments to pay for emergency community expenses. These costs can become burdensome to a homeowner who already has other increasing expenses to juggle. 
• Property tax hikes: Property taxes are another expense unique to home ownership. In some states, property taxes are increasing at a faster rate than others. The states with the highest property tax rates include New Jersey (2.23%), Illinois (2.07%), and Connecticut (1.92%). This factor doesn’t affect Nevada as much, as we rank among the lowest in the country for property tax rates at 0.49%. 
• Cost of living crisis resulting in a paycheck-to-paycheck lifestyle: Many people purchased their homes not expecting the cost of just about everything to jump so high after the pandemic. The specific definition of living paycheck to paycheck is when necessary spending, such as groceries, gasoline, and car payments, exceeds 95% of that person’s income. Approximately a quarter of American households meet this definition. For this population that are homeowners, an unexpected emergency could throw off the household budget so much that it affects mortgage payments. 
• High interest rates: Mortgage interest rates spiked in recent years, and haven’t returned to pre-pandemic levels. Higher interest rates mean higher mortgage payments, which are harder to keep up with when the price of everything else is increasing too. It also makes it more stressful for a homeowner to know that more of their monthly income is going towards interest as opposed to home equity. 
• Rising insurance premiums: Home insurance is another crucial expense that a homeowner must factor into their budget. Home insurance companies are withdrawing from some high-risk areas, such as those susceptible to wildfires. This causes insurance premiums to skyrocket even higher, as it allows insurance providers that do continue to service those areas to charge even more. 

Is Bankruptcy The Right Choice To Stop a Home Foreclosure?

A homeowner’s options will vary based on where they are in the home foreclosure timeline. If it is very early in the process, there may be alternative arrangements that can be reached. But if the foreclosure date is approaching quickly, the homeowner may want to consider filing for bankruptcy to activate the automatic stay and stop the sale. There are two main types of consumer bankruptcy the homeowner can consider: chapter 7 and chapter 13. 

Chapter 7 bankruptcy isn’t the most popular option for homeowners seeking to stop a foreclosure. It only targets unsecured debts, so any unpaid mortgage balance will remain unless the debtor takes extra steps to resolve it. However, chapter 7 can give the debtor more time to sell their home, or pay off their balance in arrears if they aren’t too far behind. The homeowner will only have approximately 3 to 6 months to do so in a chapter 7 bankruptcy case. 

Chapter 13 bankruptcy is better formulated to assist homeowners fighting creditor collection efforts in the form of home foreclosure. It rolls bankruptcy costs, secured debts, and priority debts into one payment plan, with unsecured debts only paid off to the extent possible given the debtor’s financial situation. This allows the debtor to catch up on their mortgage in arrears month by month over the course of 3 to 5 years. It can be a much stronger option for a homeowner who wishes to save their home, but they must have enough income to complete their payment plan to qualify. 

Selling a Home In Favor Of Foreclosure

Bankruptcy can help a homeowner stave off a foreclosure, but only if their budget is workable to afford mortgage payments after other debts have been cleared. But life circumstances may not allow a homeowner to afford their mortgage payments, even after bankruptcy. Here, the homeowner may want to utilize a bankruptcy filing to be personally responsible for their home’s sale rather than the bank. The bankruptcy filing will give the homeowner a limited amount of time to sell the home and avoid foreclosure. 

When the priority is avoiding foreclosure as opposed to receiving the highest possible offer for a home, the homeowner can consider a short sale or deed-in-lieu of foreclosure. In a short sale, the homeowner will offer the home for less than the mortgage balance. All proceeds will go to the lender, at which point the lender will decide to forgive any remaining balance or pursue a deficiency judgment. The lender must approve of the short sale, so the homeowner should already have an idea of how the lender intends to proceed after the sale. A short sale can be far less damaging to a homeowner’s credit than a foreclosure. 

Another option for a homeowner fighting off a foreclosure is a deed-in-lieu. This process involves turning one’s home back over to the bank to avoid a home foreclosure. This can be beneficial for a homeowner if the deed includes forgiveness of any remaining balance on the mortgage. Some lenders even assist with relocation for homeowners surrendering their homes through a deed-in-lieu. Here, the homeowner should be aware that they may incur tax liability for any deficiency balance waived through a deed-in-lieu of foreclosure. 

Executing a bankruptcy filing and a home sale to avoid a home foreclosure is almost guaranteed to be a complicated ordeal. You may want a skilled legal professional to help you determine the best course of action in your personal situation. If you’re ready to speak to an experienced Las Vegas bankruptcy lawyer about the best way for you to fight home foreclosure, call 702-370-0155. 

Are You One Of Nevada’s Many Homeowners At Risk Of Home Foreclosure? Learn More About Stopping The Process With Bankruptcy Today 

Losing a home to foreclosure is a devastating situation from which it is hard to recover. A bankruptcy filing comes with drawbacks, but is usually far preferable to all that comes with home foreclosure. A skilled Las Vegas bankruptcy attorney can help a homeowner debtor experience the best that bankruptcy has to offer with as few disadvantages as possible. Start strategizing your Nevada bankruptcy filing today by scheduling a free phone consultation with our firm. Get started for free by calling 702-370-0155.

Las Vegas Bankruptcy Lawyers

LAS VEGAS
7251 W Lake Mead BLVD #300
Las Vegas, NV89128
Office: 702-879-2499
Email: [email protected]

HENDERSON
1489 W Warm Springs Rd. Ste 110
Henderson, NV 89014
Email: [email protected]

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