Bankruptcy, Foreclosure | featured news

Stockton, the California city with the nation's second-highest foreclosure rate, is facing a moment of decision on whether to become the biggest city to file for bankruptcy, as a deadline for talks between the city and its creditors approached late Monday.

Lower unemployment, bankruptcies and foreclosures in March reduced the nation's economic stress to its lowest point this year, according to The Associated Press' monthly analysis of conditions around the country.

The nation's economic stress fell in September to a 16-month low, thanks to more hiring in New England, fewer foreclosures in the mid-Atlantic and declining bankruptcy filings in the Southeast, according to The Associated Press' monthly analysis of conditions around the country.

If nothing else, the legal maneuver will buy them some breathing room. But it also will destroy their credit rating, and it may not even be necessary.

To most people, bankruptcy is a four-letter word.

Also: What to do when credit limits suddenly drop, and whether IRAs offer protection from legal claims.

Dear Liz: My question is whether I should file for bankruptcy or try to settle my debts.

What was a bad situation is likely to turn worse, as more properties are forced into bankruptcy or foreclosure.

The House has passed legislation to give debt-strapped homeowners a chance to win lower mortgage payments through bankruptcy courts.