Avoid Foreclosure with Bankruptcy

As financial stress mounts from under and unemployment across the country, homeowners in states such as California, Arizona, and Nevada have been hit hard with foreclosures and bankruptcy filings. While the unemployed numbers seem to be easing the underemployed homeowners seek various measures on how to avoid foreclosure. What many of these people find is that working directly with their lender to obtain a loan modification is fruitless and avoiding foreclosure options which were once available are difficult to come by.

Decreasing home prices have eliminated refinancing options to most who received mortgage loans with little down or refinanced to take cash out for home improvements and paying off credit card debt. Additionally, credit standards and mean to qualify have made establishing new lines credit difficult if not impossible. Many of these homeowners qualified for stated income loans with little to no money down, getting by with a good credit score was all that was needed. Miss one payment and your credit score will suffer, making refinancing with equity impossible as well. Loan modifications have helped some of these struggling homeowners avoid foreclosure, but recent statistics have shown that the the HAMP program has been a huge failure. Approvals for permanent modifications after trial mods are completed are few and to far between. The unfortunate thing is, these homeowners are living on borrowed time only to find themselves further down the highway to foreclosure. That leaves options which many homeowners are discovering to be the real deal; hiring a bankruptcy attorney to file bankruptcy Chapter 7 or Chapter 13 bankruptcy to save their homes from foreclosure.

Filing either type of bankruptcy provides immediate foreclosure protection by stopping the foreclosure process in its tracks witth an "automatic stay". A Chapter 7 bankruptcy stops the process until the bankruptcy is completed. Traditionally at that time the past due balances must be brought current or the foreclosure proceedings start again. Recently however, lenders and investors may consider a loan modification while in a chapter 7 bankruptcy if the homeowner want to retain the home. It's not as for sure thing, but a bankruptcy attorney can attempt a loan modification if the client wants to still try and save their home. A Chapter 13 bankruptcy filing affords even more foreclosure protection by both stopping foreclosure proceedings and then incorporating past due balances into a 3 to 5 year interest free court approved payment plan.

The reality of a Chapter 7 filing until now is that without the means to catch up on arrearages, the bankruptcy filing works as a way to buy time but the foreclosure will eventually go through. Our real estate market and the condition of investors REO portfolio's has changed that though, and there may still be a chance to catch a break, but there's no guarentee. By filing a Chapter 13 that is approved by the court the filer can keep their home and pay the past due amount over time, interest free.Be sure to consult with an experienced bankruptcy attorney to determine whether a Chapter 7 or a Chapter 13 bankruptcy will provide the foreclosure protection you're seeking. T.he bankruptcy attorneys at the Law Offices of Zhou & Chini offer foreclosure defense with chapter 7 and chapter 13 bankruptcy protection. We have the experience required to get our clients the best results available through bankruptcy laws. Zhou & Chini bankruptcy attorneys offer free consultations to all our clients in an effort to save their home and avoid foreclosure. Please call us today at (800) 972-9600 or visit us on line at www.ZhouChiniLaw.com