Is Using Bankruptcy A Logical Method When Trying To Save Your Home From Foreclosure?

By Author: Nick Adama
Total Articles: 197
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Even though this website works with attorneys that offer bankruptcy as an option to avoid foreclosure, we hardly consider it as the best option for keeping the property. There are many options to avoid foreclosure and bankruptcy is usually not the best long term financial plan. Ultimately, it's up to the foreclosure victim to decide which method is best. As a professional, my only job is to make sure the client has all the required information to make an intelligent decision. In most cases, bankruptcy attorneys do not give their clients the same benefit.

Many attorneys are quick to recommend a bankruptcy to those consumers who can't make payments, but want to remain in their homes. Their theory is that the filing of a bankruptcy petition places a stay on the foreclosure case. This would let the attorney to then negotiate with the bank for a loan modification to retain the property. In theory, this would work perfectly, but, many of these attorneys do a less than adequate job of negotiating. In some situations, the attorney's idea of "negotiating" simply means making a request for a reduced payment. They don't follow up ...
... and they don't fight for their client to get the best possible payment. Anyone who has tried getting a loan modification knows that simply requesting a reduced payment will never work!

Bankruptcy will virtually always result in a greater house payment for the home owners, so they actually end up hurting| their financial situation.

Many homeowners are quick to blame their attorney when they don't end up with a reduced payment, but is this really fair? If someone goes to a bankruptcy attorney for assistance, they should expect the attorney to know how to file bankruptcy. They should not expect to receive assistance on negotiating a lower payment with their servicer and they should not expect a bankruptcy attorney to be very good at anything other than bankruptcy. People facing foreclosure are told over and over again, that they need to be careful who they hire; this includes attorneys too.

Getting foreclosure advice from a bankruptcy attorney is like taking your car to a boat mechanic. Sure, they might know how to repair it, but they are far from the right man for the job.

Homeowners really need to decide whether bankruptcy is the answer to their problem. When the mortgage is the main financial concern, it's our opinion that bankruptcy is major overkill. An experienced foreclosure negotiator or lawfirm that specializes in foreclosure negotiation, would be able to arrange an immediate stop to the foreclosure process without the need for a bankruptcy filing. Then the loan payments can then be modified to something more manageable.

If a bankruptcy filing is needed to reduce other debts, this should occur after the modification has taken place.

Once a bankruptcy has begun, the servicer will become nearly impossible to negotiate with. Not only do they discourage their reps from negotiating with people during bankruptcy, a bankruptcy may alter the income/expense numbers to rule out a loan modification completely. The homeowners budget will show a much lower need for the modification and would likely be turned down before negotiations could even begin. By modifying first, the borrower can have the best possible payment.

If you are in foreclosure and need to find help, then make sure you are getting help from an objective party that can truly evaluate your situation and provide you with all possible options for keeping your home.
Nick writes for the ForeclosureFish website and blog, which educate homeowners on how they can avoid foreclosure and beat the bank. The site describes nearly a dozen ways to prevent losing a home, including filing bankruptcy, loan modification, stopping a sheriff sale, and others. Visit the site today to read more about how foreclosure works and learn how to fight back against foreclosure: http://www.foreclosurefish.com/