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The recent financial crisis in America gave birth to a variety of economic problems. While some people were able to cope with the economic downturn by pursuing Chapter 7 or Chapter 13 bankruptcy, many were forced into foreclosures.

In some cases, homes in Kansas and other states were wrongfully foreclosed. In a huge settlement, the Independent Foreclosure Review program promised a case-by-case analysis to determine the amount of money that should be allocated to citizens that improperly lost their home. However, when costs began to balloon, the case-by-case analysis gave way to a less detailed analysis conducted by the nation’s banks.

Two years later, the first of the settlement checks are being distributed and some are very unhappy. For example, a navy veteran that had his home foreclosed while serving in the Middle East, expected a $125,000 check but received a check for $800 instead. This man believes that his status as an active duty military personnel and his imminent danger paycheck during that time should have forced the bank to receive a court order prior to foreclosing on his Oak Harbor, Washington home. However his lender, Wells Fargo, denies that he was eligible for this service.

This man is not alone in his outrage. The special director at the National Fair Housing Alliance, believes that the government categories used to determine how the funds are allocated are unclear. No one seems to be quite sure about how individuals are placed into the various categories. Those that are familiar with the process are aware of the defects in the system which will allow some to get less than they deserve while others get undeserved payments. Either way distribution of the $9.2 billion in settlement money will continue to be sent. In the end, over four million borrowers will be given a portion of the settlement amount.

Homeowners who are currently in the midst of a foreclosure may find relief through a Chapter 13 bankruptcy filing. People should understand that many legal options exist for debt relief.

Source: The Huffington Post, “Foreclosure Settlement Checks Significantly Smaller Than Regulators Forecasted: Homeowners,” May 1, 2013