How do I go about filing for bankruptcy to avoid foreclosure?

Filing for bankruptcy is a way to avoid or delay foreclosure in California. Before filing for bankruptcy, you should contact the Homeowner’s HOPE Hotline at 1-888-995-HOPE (4673) to speak to a HUD-approved housing counseling agency for free help. The two main types of bankruptcy that may be applicable in this situation are Chapter 7 and Chapter 13. Chapter 7 is a liquidation bankruptcy option. Too often, lenders will not work with homeowners in a Chapter 7 bankruptcy once they have missed payments, so this may not be a viable option for you. Chapter 13 is a reorganization bankruptcy option which allows you to restructure your debt payments into a 3-5 years repayment plan. A bankruptcy lawyer can assist you in filing a Chapter 13 bankruptcy petition in order to stop foreclosure proceedings and allow you to keep your home. Once the petition has been filed, a court-appointed trustee will review your financial situation and decide whether the debt plan meets the requirements to be approved by the court. The filing of a bankruptcy petition will put a stay on any legal action by the lender to collect what is owed, allowing you time to make up the back payments or get caught up with your mortgage payments. Once the repayment plan is approved, it is important to remain current on all payments outlined in the plan as failure to do so may result in the foreclosure process being resumed. If you are looking for more information about filing for bankruptcy or foreclosure defense law, it is important to seek out the help of a qualified lawyer in California who can help you make an informed decision.

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