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Is Using Bankruptcy A Good Option When Trying To Stop Foreclosure?

By: Nick Adama Click author's name for more of his/her articles

Even though my company deals with attorneys that offer bankruptcy as an option to stop foreclosure, we rarely consider it as an ideal choice when saving 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 borrower to decide which choice is best. As a professional, my only job is to make sure the client has all the necessary information to make an informed decision. In most cases, bankruptcy attorneys do not give their clients the same option.

Many attorneys are fast to recommend a bankruptcy to homeowners who need to stop foreclosure, but want to keep living in their homes. Their theory is that the filing of a bankruptcy petition stops the foreclosure proceedings. This would allow the lawyer to then negotiate with the bank for a repayment plan to retain the property. In theory, this would work perfectly, however, most of these attorneys do a weak job of negotiating. In some cases, the attorney's idea of "negotiating" simply means making a request for a lower 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 mortgage modification knows that simply requesting a lower payment will never be good enough!

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

Many homeowners are quick to blame their lawyer when they don't end up with a lower payment, but is this really fair? If someone goes to a bankruptcy lawyer for help, they should expect the lawyer to know how to file bankruptcy. They should not expect to receive advice on negotiating a lower payment with their bank and they should not expect a bankruptcy lawyer to be very good at anything other than bankruptcy. Home owners are warned over and over again, that they need to be careful who they work with; this includes attorneys too.

Getting foreclosure advice from a bankruptcy lawyer is like taking your car to a boat mechanic. Sure, they might be able to repair it, but they are not even close to the perfect man for the job.

Foreclosure victims 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 expert or lawfirm that specializes in foreclosure negotiation, would be able to negotiate an immediate stop to the foreclosure process without the need for a bankruptcy filing. Then the mortgage payments can then be reduced to something more affordable.

If a bankruptcy filing is required to release other debts, this should happen after the modification has been completed.

Once a bankruptcy has started, the bank will become nearly impossible to negotiate with. Not only do they dislike working with people during bankruptcy, a bankruptcy will change the income/expense figures to eliminate a mortgage modification completely. The victims 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 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.

Article Source: ABC Article Directory

About The Author: Nick publishes articles on the ForeclosureFish website to provide foreclosure help and news to homeowners in need of assistance. The site describes numerous options to save a home, including deed in lieu of foreclosure, filing bankruptcy, short sales, defending foreclosure in court, and others. Visit the site for an e-book explaining the basics of foreclosure and how to stop the process: www.foreclosurefish.com/