Many lawyers are apt to suggest a bankruptcy to foreclosure victims 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 able the lawyer to then negotiate with the lender for a workout plan to retain the property. In theory, this works perfectly, but, most of these lawyers do a less than adequate job of negotiating. In some situations, the lawyer's idea of "negotiating" simply requires 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 reduction. Anyone who has tried getting a loan modification knows that simply asking for a reduced payment will never be good enough!
Bankruptcy will almost always reflect a greater mortgage payment for the foreclosure victim, so they actually end up hurting| their financial situation.
Many foreclosure victims are quick to blame their lawyer when they don't end up with a reduced payment, but is this really fair? If someone goes to a bankruptcy lawyer for advice, they should expect the lawyer to know how to file bankruptcy. They should not expect to receive help on negotiating a lower payment with their lender and they should not expect a bankruptcy lawyer 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 trust; this includes lawyers too.
Getting foreclosure advice from a bankruptcy lawyer is like taking your car to a car mechanic. Sure, they might manage to repair it, but they are certainly not the ideal man for the job.
Homeowners really need to question whether bankruptcy is the solution to their problem. When the mortgage is the main financial problem, it's our opinion that bankruptcy is major overkill. An experienced foreclosure negotiator or lawfirm that specializes in foreclosure negotiation, would be able to get an immediate stop to the foreclosure process without the need for a bankruptcy filing. Then the mortgage payments can then be adjusted to something more reasonable.
If a bankruptcy filing is ideal to reduce other debts, this should take place after the modification has been completed.
Once a bankruptcy is in progress, the lender will become nearly impossible to negotiate with. Not only do they hate dealing with people during bankruptcy, a bankruptcy can change the income/expense figures to rule out a loan modification completely. The borrowers 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 foreclosure victim can have the best possible result.
If you are in foreclosure and need to find assistance, 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 stopping foreclosure.
Nick writes daily articles specializing in how you can save your home from foreclosure while there is still time left before a sheriff sale or eviction. Learn to defend the bank's lawsuit in court, find a reputable lawyer, delay a sheriff sale or eviction, qualify for a foreclosure loan program, and put together a reasonable alternative that will let you keep your property from being sold out from under your feet. Visit his site to read more about your options to avoid the loss of a house and understand more about how and why the housing market has been collapsing for several years now: http://www.yousaveforeclosure.com/
