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California homeowners can file personal bankruptcy

California is one of the states found to be among the hardest hit by the real estate crisis that struck during the recent recession. Because of this, those in our state who find that they have homes that are not worth what they owe may find that they qualify for a federal program designed to help. The program can reduce the principal of a loan if a person qualifies for the program. For some, this program may be an avenue to stop foreclosure and avoid a personal bankruptcy.

The program is intended to assist people before they get to the point that a personal bankruptcy is inevitable. By granting dollars to some in California to lower the amount that they owe on their mortgages, the program is intended to make real estate more affordable to some in our state. However, one recent report indicates that there have been challenges to the distribution of the funds that are available.

Though this program and others intended for the benefit of homeowners in our state are important, for some they may come too late. Many have found that they cannot pay for mortgages obtained in better times now that the economy has slowed. This has led these individuals to choose to file a bankruptcy in some cases to protect the assets that they have left.

Choosing to file for a personal bankruptcy is never an easy decision to reach. However, for some the choice is a good one because it can offer the time needed to restructure a family's finances. This can include renegotiating a mortgage or working to make a schedule for repayment. The options are many for those of us in our state to recover from the recession, and sometimes a bankruptcy is the best among them.

Source: USA Today, "Foreclosure funds slow to get to homeowners," Julie Schmit, Dec. 20, 2012

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