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Experts Say Bankruptcy Can Stop Foreclosure Quickly But Only Temporarily

January 26, 2011

Our Rancho Cucamonga personal bankruptcy lawyers were interested to see another article on the possibility of using bankruptcy as a way to stave off foreclosure. The Atlanta Journal-Constitution reported Jan. 18 on the strategy of declaring bankruptcy, which has been adopted by troubled homeowners in Georgia, California and throughout the United States. Experts said bankruptcy is a quick way to stop a foreclosure in Georgia, which has a very short foreclosure process, but may not necessarily save the home. What it can do, they said, is give the filers time to look at whether they're financially able to keep the home. It can also provide court supervision of a foreclosure, which is important because Georgia, like California, is a non-judicial foreclosure state.

Most bankruptcy filers who are trying to avoid foreclosure choose Chapter 13, which usually means a five-year repayment plan that allows them to catch up on missed mortgage payments. A credit counselor quoted in the article said about 20 percent of his clients who file for bankruptcy cite foreclosure as a reason. However, he said, many of his clients choose bankruptcy because they come to him for help too late for any other solution. A consumer bankruptcy attorney told the newspaper that bankruptcy also isn't necessarily the best choice. For one thing, he said, many clients consider it to hold on to homes that aren't financially worthwhile. A client of his added that he decided against bankruptcy because his non-mortgage finances were fine, and his home loan problems would hurt his finances at least as badly as bankruptcy.

As Huntington Beach individual bankruptcy attorneys, we're glad this article stresses the importance of timing and early action in a bankruptcy. Waiting too long to take action, whether it's bankruptcy, credit counseling or a loan modification, can take away opportunities and options in the future. If you do decide to file for bankruptcy, it can also allow you to run through assets that you could have saved instead, giving you a much-needed cushion for the time when you're out of bankruptcy and ready to rebuild your finances. When clients come to us to discuss a bankruptcy to avoid foreclosure, we start by examining their finances to see if, like the man in the article, they are better off with an alternative approach such as a loan modification. If not, we structure the bankruptcy with the client's mortgage and other financial priorities in mind.

Howard Law PC represents clients who are in bankruptcy or considering it to deal with overwhelming debt of all types. That includes mortgage debt that has become a major burden as well as medical bills, credit card debt and more. If you're considering bankruptcy as a solution to an upcoming foreclosure, our Corona consumer bankruptcy lawyers can offer you options. We start every bankruptcy case by reviewing the client's finances to determine whether filing will achieve the client's goals without causing overly drastic results. In addition to a Chapter 13 bankruptcy, we may be able to offer alternatives such as a loan modification or a predatory lending lawsuit, depending on your situation.

If you're in default or foreclosure or you feel like you're drowning in debt, you should call Howard Law for help. To learn more or set up a free consultation, send us a message online or call 1-800-872-5925 toll-free.